Encouraging the Next Leap Forward

By Brad

The effect mobile broadband investment and deployment has had on innovation is easy to see. All you need to do is flip through the apps on a smartphone, or fire up Netflix on an iPad.

Less apparent has been the effect on the U.S. economy, specifically when it comes to job creation. Now a study from NDN and the New Policy Institute, “The Employment Effects of Advances in Internet and Wireless Technology,” for the first time provides some startling new numbers. Authored by Robert J. Shapiro and Kevin A. Hassett, the study examines the positive effects network advancements have on the economy.

Case in point: the move from 2G to the current widespread 3G, which the authors find offered a major boost the economy. As they write:

New econometric analysis set forth in this study shows that the investments and innovation entailed in the transition from 2G to 3G wireless technologies and Internet infrastructure spurred the creation of some 1,585,000 new jobs from April 2007 to June 2011.

That’s more than 1.5 million jobs during a time, the authors point out, that the U.S. economy lost close to 5.3 million jobs in the private sector. And with providers in a highly competitive market currently building out the next-generation of networks, another major boost could be on the horizon:

The rapid transition from 3G to 4G mobile broadband networks should continue to stimulate new jobs creation in a short time frame, generating more than 231,000 jobs for every 10 percentage point gain in penetration rates within a year.

In other words, the more 4G is built out, the more jobs there will be for Americans. While this may seem like a no-brainer — doesn’t investment and construction almost always create jobs? — Shapiro and Hassett make the argument that the government must do more to encourage a speedier build-out by an industry leading the way to economic recovery. As they write:

These results suggest that a national job creation strategy should include or encourage appropriate measures to accelerate the deployment of 4G infrastructure.

The study goes on to explore some particular areas, including health care and public safety, that will benefit greatly from accelerated 4G deployment. On the proposed nationwide wireless communication network dedicated to public safety, the authors write:

This 4G-based network could be especially valuable when major terrorism or natural disasters strike. The original impetus came from the 9/11 Commission’s criticism of the lack of inter-operable communications systems among the diverse first-responders at the World Trade Center, and the resulting vulnerabilities for homeland security. The benefits from more routine use of the system also would be considerable. The begin, the initial proposed funding of $10.7 billion would create nearly 100,000 new jobs for network planners, laborers to lay and install cable, and technicians to build and install network devices, wireless access points, video surveillance cameras, gunshot detectors, and environmental sensors. As the network is established, it would create more jobs for network administrators and managers, technical support staff, network analysts, project managers, and IT analysts.

100,000 jobs — and that’s just from public safety build-out. To get the full picture on how speeding up the deployment of 4G technology can transform our economy, check out Shapiro and Hassett’s full study. You’ll not only come away encouraged about the future, you’ll learn stuff like this:

Mobile providers rolled out the first generation of cellular wireless networks in the United States in the early-1980s, before the commercial emergence of the Internet. Until that time, mobile phones relied on tall, high-power transmitters and receivers which used a limited number of radio frequencies to cover entire cities. These conditions sharply limited the network capacity and these mobile phones. For example, the first mobile phone network for New York City could support a total of 700 mobile customers and no more than 12 conversation at any time.

Shapiro and Hassett’s full study, “The Employment Effects of Advances in Internet and Wireless Infrastructure: Evaluating the Transitions from 2G to 3G and from 3G to 4G,” is available here in a PDF. Check it out.