Ungated Post | 03 Mar 2017

Understanding the role of mobile technology in economic growth

Recent years have seen startling growth in the reach of mobile technology. Such growth has been truly ‘global’ with vast investment in mobile infrastructure, supporting increased network coverage across emerging markets in all six continents. The impact of this extends far beyond convenience and consumer choice. Mobile internet technologies are transforming product and labour markets the world over. They are helping to propel ideas, connect businesses and customers and match workers to opportunities.

Our research, commissioned by Google, shone a light on how the rapid ascent of mobile internet has supported widespread economic and social gains. Our pioneering econometric model identified a causal relationship between mobile internet penetration and two vital enablers of supply-side growth: labour productivity and the labour force penetration rate. Our research quantified how mobile internet technology could deliver long-term economic benefits both by making the existing workforce more productive and by enabling more people of working-age to actively seek work in the formal economy. As a result, we demonstrated how mobile internet technologies help to underpin long-term economic growth—to an extent that goes far beyond the demand-side footprint of firms involved in the manufacture, design and distribution of smartphones.

The application of this research to countries in the Association of South East Asian Nations (ASEAN) revealed the major stakes at play.  We estimated that across the region the increase in mobile internet penetration over the past five years has boosted GDP by US $47.2 billion—the equivalent of over seven percent of total recorded growth. Moreover, the resulting increase in labour market participation was sufficient to support an extra 900,000 jobs. Looking ahead, given our projections for the future growth in mobile internet, we forecast that over the next five years this impact will be worth some US $58.1 billion in GDP and over one million jobs.   

Such an increase in GDP and employment will naturally translate into higher government revenues given the associated rise in wages and profits. These revenues have the potential to support considerable social benefits. For example, we estimated that the extra tax would be sufficient to fund the construction of close to 7,400 km of new two-lane highways, to finance the implementation of routine immunisation programmes for 22 years or to support 1.3 million students through primary education across the region. 

You may be interested in

Post

Quantum Computing could boost UK productivity and GDP growth, but government support is crucial

New research from Oxford Economics, published today, predicts that quantum computing could give the UK an economy-wide productivity boost of up to 7% by 2045 – equivalent to every worker achieving an additional three weeks’ worth of productivity per year without working an extra hour.

Find Out More
Real estate data and forecast

Post

Oxford Economics enhances its real estate solutions with the addition of MSCI data

Oxford Economics is delighted to announce a significant product enhancement to its Real Estate Economics Service and Global Economic Model, with the addition of MSCI historic real estate index data.  

Find Out More

Post

From Floppy Disks to AI: A Fireside Chat with Adrian Cooper, CEO of Oxford Economics

Discover the journey of Adrian Cooper, CEO of Oxford Economics, in shaping the firm into a global leader, along with his insights and vision for the future in an exclusive interview.

Find Out More