28 August 2019

What is the impact of investing in connectivity?

Connectivity is essential for human survival and wellbeing. As a result, the gradual adoption of digital communications during the past decades has had a profound socioeconomic impact on our lives.

While the importance of connectivity is widely accepted, we could not find a clear synthesis of rigorous evidence on how it contributes to the economy to help us inform our strategy or drive impact across our investments. To fill that gap and help investors in a similar position, we are pleased to publish this impact evidence review by Dr. Pantelis Koutroumpis, Lead Economist at the Programme of Technological and Economic Change at the Oxford Martin School.

The review outlines the well-evidenced key effects that result from connectivity across the economy, society, institutions, and the areas where evidence is thin or still lacking. It then outlines the properties of a well-functioning connectivity system, against which researchers could benchmark the status of connectivity interventions across the world, as well as some of the emerging risks policy-makers and investors should mitigate.

In particular, the evidence review highlights that it is hard to determine the impact of connectivity in general and even more difficult in many data-poor emerging markets. We are excited that we are now embarking on a ground-breaking study to assess the impacts of largescale fibre roll-out on households, businesses, and local economies in the Democratic Republic of the Congo, as part of our recent US$180m equity investment in Liquid Telecom, the largest independent fibre and cloud provider in Africa. CDC and Liquid, in partnership with a research organisation, will examine the impact of operationalising a currently dormant fibre network in the Democratic Republic of the Congo. Our goal will be to conduct primary data collection to gather some baseline data before the fibre is lit up and then attempt to quantify the impact on households and businesses and the changes to people’s lives after receiving access to quality Internet.