News Release

Broadband Internet Adoption Could Double U.S. Living Standards in 15 Years

John Chambers Conveys a Clear Message at Davos: There is a direct correlation between high speed Internet access, productivity and increased standard of living.
Jan 26, 2001

January 26, 2001 - Cisco CEO and president John Chambers joined world leaders this week at the World Economic Forum in Davos, Switzerland, to discuss the future of the world's economies. Chambers shared his vision regarding how companies, countries and people can increase their productivity by harnessing the power of the Internet. Chambers explained that at the current rate of three percent productivity growth, the U.S. standard of living will double in less than 25 years. If we increase productivity to five percent, we can double our standard of living in 15 years. "It's your choice," said John Chambers. "We have the opportunity to double productivity and the standard of living in one generation, or two." He used the U.S. as an example, but explained that this applies to all countries.

Chambers also reminded world business and government leaders that just as businesses have benefited from great Internet-based productivity gains, societies can also benefit. He believes that the Internet is as fundamental as any utility, like water or electricity, and that access to the Internet is key to increased productivity. "The Internet exceeds the combined productivity of telephony, transportation and electricity," said Chambers while in Davos. Through the acceleration of high-speed Internet access, commonly known as broadband, Chambers believes countries can accelerate productivity faster than ever before. In turn, the Internet can improve the standard of living for people worldwide and address the digital and the education divides. Chambers added, "the infrastructure of the future is changing."

Chambers suggested that changing the productivity model is imperative-critical to survival. He highlighted the U.S. 2001 Economic Report of the President which detailed the link between increased broadband deployment and improved productivity within the workplace. The report showed a direct correlation between broadband, increased productivity and increased standard of living. For example, industries using the Internet saw a four percent annual growth in productivity while industries that are not using the Internet have experienced a one percent annual increase in productivity.

Along with increased productivity, countries with more bandwidth will have higher e-commerce activity per capita as they build infrastructure around deploying high-speed Internet connections. In developed countries, where the price of bandwidth decreases, the number of users will increase, adding future economic growth. In the U.S., every one million homes with broadband are expected to contribute $10 billion in economic output based upon research by Gartner Group.

Chambers' message is clear, there is a direct correlation between widespread broadband acceptance and improved productivity, which helps improve the standard of living worldwide and to close the digital divide.

*on how Cisco is creating a Digital Opportunity

*regarding John Chamber's vision

*on issues important to Cisco and the development of the global networked economy

*about the World Economic forum

# # #