Stimulus Plans and e Global ICT Industry 3.1 What Role for ICTs & Broadband in Stimulus? more competitive in the long-term (Insight 4). The ICT sector is viewed as a strategic sector where strong positive externalities mean that the total returns to investment easily justify initial outlays. Justifi cations for ICT Investments in Stimulus Plans Historically, there is also a large body of research sup-porting positive economic returns and strong exter-nalities to investment in ICTs. Investment is a con-sistent driver of economic growth in regression work The justifi cation for including investments in ICT infrastructure in current stimulus plans is that access to the Internet is vital for the participation of fi rms and organizations in today’s information economy, as well as the provision of many online e-government services. The OECD (2009a) suggests that new ICT infrastructure investments are good targets for stimu-lus e.g. Hardy (1980) & Norton (1992) – however, these studies failed to allow for two-way causation. After allowing for two-way causation (“endogeneity”) and time lags, Roller & Waverman (1996)28 found strong positive growth effects of investment in telecommu-nications, spending, because these projects typically represent with a 10% rise in fi xed-line penetration shovel-ready investments that “can minimize eco-nomic resulting in a 2.8% rise in GDP. Waverman, Meschi & Fuss (2005) found a similar positive and signifi cant impact of mobile telephony on economic growth in developing countries. Booz & Company 2009 found that a 10% higher broadband penetration in any year is correlated with a 1.5% increase in labour productiv-ity leakages and may promise stronger marginal impacts on supply and productivity than investing in established networks such as electricity, gas, water and transportation”.27 Broadband networks in particular represent the information super-highways of today’s online economy (see next Section). over the following fi ve years. In these recessionary times, however, governments are under growing pressure to invest funds strategically for the future to create more jobs and make their econo-mies Many of these studies distinguish between high-in-come and low-income economies as structurally Confronting the Crisis: ICT Stimulus Plans for Economic Growth 25