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Fibre, multiplier effect: 4.4 euros of GDP for every euro invested

The impact on the economy and employment photographed by three studies by Luiss, Deloitte and the Politecnico di Torino. From construction and use of Ftth networks in white areas contribution of 21.5 billion

by Andrea Biondi

(Adobe Stock)

4' min read

Translated by AI
Versione italiana

4' min read

Translated by AI
Versione italiana

It is not just a question of cables, excavations or data running faster under the road surface of our cities and, above all, of the most remote villages. It is something deeper, on which much of the country's future development is inevitably at stake. The numbers are unequivocal and the most significant figure is that of the economic multiplier: for every euro invested in fibre broadband, 4.4 euros of GDP are generated.

This will be discussed next Monday at the Luiss Guido Carli University in Rome, which for the occasion will become the centre of gravity of a reflection that no longer admits of procrastination. The title of the event, 'Fiber Switch On: access to the future is now', sounds like a polite but firm ultimatum to a country that has built the highway but is still struggling to get into gear.

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Three studies

Three studies will be presented. The figure that sounds like a wake-up call (and at the same time like good news) comes from the report 'The Ftth fibre switch-on: economic and employment impacts for Italia', edited by Marco Vulpiani, senior partner, head of Deloitte Economics. In white areas - the 'market failure' municipalities, where the private sector does not invest without a boost from public incentives - every euro spent on FTT (fibre to the home laid in those areas by Open Fiber, which has won three public tenders) has generated, as mentioned, 4.4 euros of GDP so far.

The number is the sum of two speeds: infrastructure construction is worth 1.1 euro of GDP per euro invested; network utilisation adds 3.3 euro. Translated into magnitudes: 21.5 billion of total contribution to GDP in white areas, between 5.3 billion related to construction and 16.2 to the utilisation phase.

The Impact on Employment and Taxation

The second dimension is employment: more than 343,000 total jobs between the construction phase and the subsequent phase of use, with about 90,300 equivalent jobs generated directly by the construction of the network and about 252,700 linked to the induced economic effect in the territories. An impact that is distributed along the entire supply chain, with repercussions on construction, manufacturing and professional services, but also on micro and small enterprises in inland areas, for which ultra-fast connectivity represents a growing factor of competitiveness.

Then there is a less visible but no less significant effect: the fiscal one. The construction phase in white areas alone generated revenue estimated at over 2.5 billion euro, of which about 1.1 billion related to VAT. The construction sector is confirmed as one of the main beneficiaries, with a contribution to GDP of about 1.3 billion generated by the activities related to the construction of the infrastructure.

The "Italia paradox"

Yet this is where the 'Italia paradox' lies, as pointed out by the study 'Fiber for human value' edited by Enzo Peruffo, Luiss Pro-Rector for Education and Director of the Research Centre in Strategic Change 'Franco Fontana' and Davide Quaglione, full professor of Applied Economics University of Chieti-Pescara. The crux of the matter lies in the adoption rate (the so-called take-up rate), which remains pinned at around 25%. This is why the key word of the Luiss day is not 'switch-off' but 'switch-on'. Because fibre, if it remains off, is a motorway with empty lanes. Instead, explains the Luiss study, it is an 'experience good'. Those who use it perceive higher productivity (+0.47 on the citizens' appreciation scale) and a quality of life that radically changes, enabling telemedicine, smartworking, and schools that are finally connected.

Sostenibilità

To those who ask "why such a hurry?", the Politecnico di Torino responds with the study 'The Ftth fibre switch-on: an engine for sustainability', presented by Michela Meo, Professor of Telecommunications at the Politecnico di Torino. Switching off copper and moving to a full-fibre network reduces the energy consumption of access networks by 86%: from around 551 GWh per year to 77. And it cuts about 125 kilotons of CO2 each year. The time factor is not neutral: anticipating the transition can be worth more than 4 TWh of additional energy savings in ten years by preventing legacy equipment from remaining switched on and underused.

In short, the message that emerges from the Deloitte, Luiss and Politecnico di Torino studies is unequivocal: switch-on is not an option, but a necessity for the competitiveness of the country-system. Companies that have already 'switched on' fibre show superior performance in terms of turnover and innovation and the Public Administration, if connected, finally becomes inclusive and efficient. However, to turn this potential into reality, a cultural change of step is needed. It is not enough to lay cables right on the doorstep; we need to 'switch on' awareness in that 54% of Italians who still lack basic digital skills. An industrial policy that incentivises the switching off of copper, in line with what is also envisaged at the European level with the new Digital Networks Act, would close the circle in this framework.

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