NDN Study Estimates the Economic and Employment Gains From Investments in Next-Generation Wireless Broadband Infrastructure

WASHINGTON, Jan. 18, 2012 /PRNewswire-USNewswire/ --  A new economic study released today by NDN finds that the adoption and use of successive generations of cell phones supported by the transition from 2G to 3G wireless networks led to the creation of 1,585,000 new jobs in the U.S. between April 2007 and June 2011. The study also estimates that a rapid transition from 3G to 4G mobile broadband networks could create more than 231,000 additional jobs within a year.

The study, "The Employment Effects of Advances in Internet and Wireless Infrastructure: Evaluating the Transitions from 2G to 3G and from 3G to 4G," was co-authored by economists Robert J. Shapiro, chairman of the Globalization Initiative at NDN and former U.S. Under Secretary of Commerce for Economic Affairs, and Kevin A. Hassett, senior fellow and director of economic policy studies at the American Enterprise Institute.  In the paper, the authors quantify the large economic benefits – from employment to innovation – associated with the deployment of and investment in more advanced wireless infrastructure and associated mobile devices, tracking the impact of the transitions from 2G to 3G and from 3G to 4G network technologies.

"The technical advances from 2G to 3G wireless broadband and the spread of these more advanced technologies led directly to the creation of more than 1.5 million new jobs over four years, during a period when overall private-sector employment declined by 5.3 million jobs," said Shapiro. "The private investments that spurred the build-out of 3G broadband networks, with all of their innovations, happened in a highly-competitive wireless market in the United States.  The same competitive forces are now driving the additional investments and innovations in the current transition from 3G to 4G wireless networks."

Using a unique database drawn from the Nielsen Mobile Insights survey (Q4'06-Q2'11) on the ownership of mobile devices operating on successive generations of wireless infrastructure, combined with state-by-state employment data, the research by Shapiro and Hassett found that every 10 percentage point increase in the penetration of a new generation of wireless phones and networks leads to a 0.07 percentage point increase in jobs in the next quarter, with continuing gains in subsequent quarters. 

"The authors effectively show that the U.S. wireless sector is creating real job opportunities for Americans across the country, especially during a time of economic duress," said Simon Rosenberg, president and founder of NDN.  "The authors make a strong case for the inclusion of measures to accelerate the deployment of 4G infrastructure in any national job creation strategy to help jumpstart America's economy. As policymakers look to 2012, they should be sure to encourage a regulatory environment that promotes continued high levels of private-sector investment in today's competitive wireless market."

"Past experience suggests that the shift to 4G wireless infrastructure will also open the door to a wide range of new applications, products, services, and even industries that no one can anticipate in advance," said Hassett.  "These developments almost certainly will produce economic gains at least comparable to those generated by the previous build-out and adoption of 3G technologies and related devices in America."

The study also examines the emergence and spread of new business operations based on the transition from 2G to 3G, including mobile e-commerce, mobile social networking, and location-based services.  The authors also analyze the types of economic changes and benefits which may attend the current transition from 3G to 4G, in such areas as health, energy and cloud-based services.

"In the 21st century global economy, advanced wireless networks are a foundation on which much global economic activity takes place," said Shapiro. "3G and 4G networks and the technologies associated with them provide that foundation, moving entire economies. For America to stay competitive and prosperous, it is imperative that private-sector investment and upgrades in these technologies continue to advance, so our businesses and workers can meet demand from consumers and firms on a national and global scale."

To view the full study, click here. To request an interview with the authors, contact Catherine Walsh by phone at 202-842-7217, or by e-mail at [email protected].

About NDN

NDN is a leading think tank and advocacy organization based in Washington, DC. NDN's major areas of study include programs looking at globalization and macro-economic policy, clean energy, immigration and border issues, Latin America, U.S. demographic change, and the impact of new mobile technology on civil society. To learn more, please visit the website.

About the Authors

Robert J. Shapiro, chairman of the economic advisory firm Sonecon and chair of the Globalization Initiative at NDN, served as the Under Secretary of Commerce for Economic Affairs during the Clinton Administration. Dr. Shapiro is also an advisor to the International Monetary Fund and a senior fellow at the McDonough School of Business at Georgetown University..

Kevin A. Hassett, senior fellow and director of economic policy studies at the American Enterprise Institute, was previously a senior economist at the Board of Governors of the Federal Reserve System.

SOURCE NDN