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Mobile Telecom Offers Enormous Benefits, Finds New Report

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Boston Consulting Group and Qualcomm have just released a new report examining the impact of mobile devices on the economy, focusing on the benefits mobile brings to small businesses and consumers in six countries including the United States, Germany, Korea, Brazil, China and India. The authors estimate that mobile technologies increase consumer welfare by the equivalent of 10 percent of total income in developed countries, and 20-45 percent of total income in developing countries. In fact, the total value that mobile brings to consumers is estimated to be more than double the size of the of the entire mobile industry revenue.

These economic gains have been enabled by remarkable technological progress. Global average cost per megabyte has declined from nearly 98 percent between 2005 and 2013, while maximum data speed has increased from ~10 to 250 mbps over the same period. These vast changes in cost and performance have made mobile technology affordable to billions of people around the world. Even so, more technological progress is necessary: 90 percent of mobile technology users report having problems with their connection. 5G and 6G technologies will continue to improve access and connectivity for users, and governments must keep policies in “cultivate innovation and investment in mobile technologies” with a mix of strong government support and industry self-regulation.

This technological process is possible to a large extent because mobile technology companies invest heavily in both R&D and infrastructure. Technology and component design companies invest nearly 1/4th of their revenue on R&D, while telecommunications infrastructure companies invest 1/8th. This is a higher share of R&D investment than any other industry except for biotechnology. Multinational operators, on the other hand, invest 15 of revenues on capital expenditures. Worldwide, mobile companies have invested over $2 trillion since 2009.

The report also shows the benefits of mobile technology for small and medium-sized enterprises (SMEs). On average in the three developed countries studied (USA, Germany, and Korea), SMEs that use the most mobile technology grow their revenue 2 times more quickly than peer companies, and increase employment 8.5 times more quickly. In the developing countries, the effects were less extreme but still significant: the top mobile users grew 1.5 times faster than laggard mobile users in terms of revenue, and 3 times faster in terms of employment.

Reports such as these serve as a good reminder of the incredible transformation that IT and mobile technology have brought about across the world. Putting connected computers in the pocket of nearly everyone on the planet is no easy task, but the demand is there and the rewards are immense. So long as countries keep encouraging mobile growth the benefits will continue to be felt in developed and developing countries alike.

(photo courtesy of Meena Kadri)

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About the author

Ben Miller is ITIF’s Economic Growth Policy Analyst, specializing in the connection between technology, innovation, and everything else in the macroeconomy.