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November 27, 2012

How mobile phones can help economic growth

3G technology and mobile data can lead to an increase in GDP per capita growth.

By Cbr Rolling Blog

mobile data

A report by Deloitte and GSMA examined the impact of mobile data usage on GDP growth across developed and developing countries.

The study found that countries with a higher level of data usage, like Russia, the UK and South Korea, have seen an increase in their GDP growth by 1.4%.

In developing markets, it was found that a 10% expansion in mobile penetration caused an increase in productivity by 4.2%.

"The development of data services have the potential to drive economic development in the same way in which voice services have in previous generations," said Chris Williams, Deloitte telecommunications partner. "Policy makers need to consider the implications of this report in their support for the development of mobile data".

Markets where consumers were substituting a 2G connection with a 3G one caused GDP growth to rise. A 10% rise in 3G penetration was found to cause GDP per capita growth to increase by 0.15 percentage points.

"Total mobile connections will stand at 6.8 billion with mobile subscriber penetration at 45 per cent by the end of 2012," said Tom Philips, chief government and regulatory affairs officer at GSMA. "In this period of economic uncertainty, governments should look to the mobile industry as a key partner for economic growth and put in place policies that encourage investment in broadband infrastructure, which will serve to enhance productivity, as well as policies to drive the development of new data services that will boost the economy and benefit society."

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When mobile data was doubled it was found to lead to an increase of 0.5 percentage points in GDP growth.

The report suggests that governments should consider increased investments in broadband networks which the report shows has a significant impact on economic benefits.

"This study is an important addition to the growing body of empirical evidence demonstrating the impact of broadband on economic growth," said Dr. Robert Pepper, vice president of global technology policy at Cisco. "As people around the world increasingly connect to the Internet via multiple wireless devices to use rich content anytime, anywhere, it is creating a deluge of data that is changing the way we work, live and play."

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