Wireless Broadband Infrastructure Set to Become a Key Economic Driver

By October 10, 2013

Now seen as far more than a mere tool for improving telecommunications, wireless broadband is likely to trigger a new technological leap forward.

A $1.2 trillion cumulative addition to US GDP by 2017: this is what the research team at Information Age Economics (IAE) promises the US government in a recent report – ‘Wireless Broadband Infrastructure: a catalyst for GDP and Job Growth 2013-2017 – commissioned by PCIA, the Wireless Infrastructure Association. The IAE conclusions indicate that, in the wake of the widespread computerisation of workplace processes, wireless broadband could well act as the next catalyst for digitally-driven economic growth in developed countries. Examining the impact of wireless broadband in the United States, the report underlines the importance of deploying a robust broadband infrastructure which “almost immediately stimulates job and income growth” and also enables local authorities to reap efficiency gains.

Taking digital to the next level

From the inception of wireless telecommunications in the early 1980s, when it did not at first arouse a great deal of interest, wireless has progressed to the stage where there are now actually more subscriptions than people in the United States, and a large number of subscribers (81% in 2013) are already using 3G systems or mobile broadband. According to the report, wireless broadband, currently defined as 3G or better, is available to an estimated 99.5% of the US population. This is likely to increase with the launch of new 4G products, especially when subscribers phase out their older devices and upgrade to faster services via 4G-enabled smartphones. Access to this technology is set to entail significant, rapid economic growth, in terms of both GDP and employment, reckons IAE, estimating that industry-projected mobile broadband investment will generate up to 1.2 million net new jobs over the coming five years.  In addition IAE sees wireless broadband as a key enabling technology likely to continue a common economic pattern by unleashing “positive productivity shocks” from spinoff innovations – such as mobile payments and Machine-to-Machine applications – comparable with the global impact of the personal computer and the Internet. IAE forecasts a very high return on investment for the US economy, estimating that an investment of $35 billion a year could lead to growth worth ten times this figure, i.e. an increase in GDP of between 1.6% and 2.2% attributable to the rollout of wireless broadband.

Optimum impact requires State intervention

IAE predicts that both direct and indirect benefits to the United States from wireless broadband technology will be sizeable, and as the report highlights, the vast majority of the US population already has access. However, if this next generation technology is to truly stimulate the economy, a systematic policy of ensuring “nationwide, ubiquitous and affordable” wireless broadband is a must, given that optimal growth in mobile services is likely to come only when maximum connectivity of potential customers has been achieved. According to the IAE analysts, in economic terms the benefits from wireless broadband for communications and data exchange can be compared with those afforded by the national railroad and interstate highway systems and the Internet. The key challenge for the US authorities – and by extension those in Europe – is to ensure the provision of robust, universally available, infrastructure as a prerequisite for the development of 4G and, going forward, 5G technologies.

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