A few days back I came across an excellent report written by Deloitte and Cisco for GSMA association titled, “What is the impact of mobile telephony on economic growth?” The report aims to explore an important question in the ICT4D discourse – what effect does mobile phone adoption have on economic growth?
The report argues that “mobile sector have become an essential part of how economies work and function” and “mobile communications can offer unprecedented opportunities for economic growth” for developing and developed countries. The article bases itself on the essential premise that mobile phones lead to improved communication, social inclusion, economic activity in various sectors thereby leading to an increase in economic growth and worker productivity.
The article compares the effect of mobile adoption in both developing and developed countries which makes it very interesting. The earlier studies I have come across had a narrower focus as they looked at either developed or developing countries and did not provide a comparison between the two.
Specifically, the article looks the following research questions:
Question 1 – What is the impact of 3G penetration on GDP growth?
Question 2 – What is the impact of mobile data on GDP growth?
Question 3 – What is the impact of basic mobile telephony on productivity in developing markets?
To calculate the extent of impact of mobile adoption to economic growth, the article estimates a series of econometric models. The details of the calculations are available in Appendix A, B & C of the article. I’m summarising the results of the article succinctly in the table below –
Deloitte and Cisco aim to publish the report on an annual basis as usage of mobile grows with an aim to provide ICT4D practitioners and policy makers a useful source of information. The articles gives a lot of importance to the contribution of 3G mobile communication towards economic growth. This makes it important for us to ensure that we create conditions to increase 3G penetration in developing countries as well to help them to steer towards a path of much faster economic growth.
How much are we able to accomplish? – I guess only time can tell!
If readers have other interesting reports, anecdotes, statistics or facts which will help us to understand the impact of mobile adoption on economic growth better – do share it with us.
Two words…. cause or effect… (longer comment on Tim Unwin’s post re: the same article)