London Briefing/Chris Johns: Broadband access is becoming a defining issue for many economies.

Start with the symbolism: in the race to appear cool - the results of which have real economic effects in our globalised world - the degree of broadband penetration is a key indicator of winners and losers.

Learned articles are written in many countries - not just the UK - about the importance of access to the high-speed internet. League tables are published and receive almost as much attention as the Premiership. Well, perhaps not quite that much, but you get the idea.

As with all league tables there is much hand-wringing by those not at the top which, as a matter of arithmetic, is just about everybody.

According to the Organisation for Economic Co-operation and Development (OECD), the UK has 13.5 broadband subscribers per 100 inhabitants, just a bit less than the US but a lot less than Korea, much of Scandinavia, Switzerland and Canada. Perhaps all those cold countries have finally found something to do during the winter.

Om Malik, a tech guru famous throughout the blogosphere has created a wiki (a simple, community written, online database) devoted to global broadband coverage (http://www.socialtext.net/broadband/). Statistics are available for anyone to compare their own country against international norms or just to check on pricing and competition.

Competition in the UK is driven by nine main suppliers, led, of course, by BT (in the news this week with market rumours that it is thinking of buying one of its eight competitors).

Two years ago, you could have paid around £30 (€43.70) a month for 0.5 megabits per second (MBPS) of bandwidth. Today, you can get 2 MBPS for £15 per month - quadruple the speed for half the price. Such is the level of competition, it is almost certain that this progression in pricing/speed will continue.

Price falls and speed increases like these are undoubtedly positive, but don't count for much in the international race for the fastest connection at the lowest price. For similar prices or less, Japanese broadband subscribers are apparently able to reach speeds up to 100 MBPS. The highest of these astonishing speeds is delivered over fibre optic cable rather than copper wire.

Fibre to the home (FTTH) is all the rage in Amsterdam and Rotterdam, where local communities are attempting to install their own networks. The French and Austrians are reported to be considering similar schemes. FTTH could become the next big thing in the technology race and my sense is that the UK, in this regard at least, is precisely nowhere.

Do we need such high speeds? At any point in the history of the internet, it was generally reckoned that the best available technology was "enough".

When 56k dial-up modems replaced the earlier 33k vintage many of us were impressed, but quickly hankered after a 64k ISDN line. More recently, many learned commentators opined that 2 MPBS would satisfy all but the most demanding of users. Then came internet television and the prospect of instant (more or less) movie downloads. And so it goes: build it and they will come.

High-end innovation now demands high-end broadband connections and the pace of innovation is startling. A recent example comes with the announcement of venture capital funding (from Google and the original backers of Skype) for a Spanish company called Fon. What Fon states as its mission is no less to do for broadband what Skype did for phone calls (and phone companies): free mobile broadband access is the goal.

Whether or not such ambition can be realised remains to be seen, but it remains as true as ever that it is next to impossible to make sustainable returns on capital from investment in telecommunications.

ADSL2 is a broadband offering from the likes of Be and Bulldog that purports to run at speeds up to 25 MBPS. Bulldog is a subsidiary of Cable & Wireless and it may or may not be a coincidence that the parent company has not exactly been giving much joy to shareholders over the last while.

If the UK - and many other countries - are to continue moving up the value chain in response to the threat posed by China and India, access to high-speed broadband is essential. Such access can only ever be a part of the story but, as skilled service sector jobs start to be outsourced, we will need every edge that we can get.

We are not doing badly, but I wonder whether that will be good enough in the long run.

• Chris Johns is an investment strategist with Collins Stewart. All opinions are personal.