Globally, mobile technology has emerged as a primary engine of economic growth, stimulating enormous private-sector spending in both R&D and infrastructure, and profoundly changing daily lives—everywhere.
Dramatic performance improvements in mobile communications standards have propelled mobile to become the fastest adopted technology of all time.
- User costs have plummeted. The average mobile subscriber cost per megabyte decreased 99 percent between 2005 and 2013. Smartphones are now available for as little as $40.
- Mobile network infrastructure costs have also fallen dramatically, while performance has soared—a 95 percent cost reduction (per megabyte transmitted) from second generation (2G) networks to third generation (3G) networks, and a further 67 percent drop from 3G to fourth generation (4G) networks.
- Mobile data-transmission speeds have skyrocketed: 4G networks offer 12,000 times faster data-transmission speeds than 2G networks.
- Consumer adoption of 3G and 4G standards has outpaced that of all other technologies, growing to nearly 3 billion connections in less than 15 years, and projected to exceed 8 billion connections by 2020.
- Effective industry-driven collaborations to solve technical problems, set standards, and license intellectual property have been key enablers in this revolution.
Mobile is connecting and empowering consumers—everywhere.
- Consumers derive enormous value from mobile. Our research across six countries—the U.S., Germany, South Korea, Brazil, China, and India—reveals that the value consumers place on mobile technologies ranges from $700 to $6,000 per user. The data show an aggregate annual consumer value for mobile technologies of $6.4 trillion across the six countries, above the cost of the devices and services.
- This aggregate consumer surplus from mobile technologies exceeds the GDP of every country in the world except for the U.S. and China.
- Mobile is especially valuable to emerging market consumers. In China and India, the consumer-reported value of mobile exceeds 40 percent of average income.
- The market demand for continued innovation and investment is clear: 90 percent of 3G and 4G consumers report they want even faster data speeds, more coverage, more battery life, and many other improvements. With global data usage doubling every year, if this trend continues, data traffic will be 1,000 times greater within a decade. New technologies will be required to accommodate this expanding demand.
- Consumers expect that mobile will continue to improve and transform their lives, delivering a broader range of services that will connect them with everything, everywhere.
Small and medium-sized enterprises (SMEs) that adopt advanced mobile technologies are the fastest growing.
- SMEs that are mobile leaders are winning. Typically, the 25 percent of SMEs that use mobile services more intensively see their revenues growing up to two times faster and add jobs up to eight times faster than their peers.
- The mobile laggards among SMEs have revenue growth and job creation that substantially lag behind the leaders. With fewer plans to invest in mobile, these SMEs are at risk of being left further behind.
- SME mobile leaders in emerging markets are leapfrogging older generations of technology still widely used in developed markets. The share of mobile leaders in Brazil, China, and India exceeds that in the developed countries examined.
- Greater mobile adoption by SMEs can create jobs. If more SMEs expand their businesses at the rate of the mobile leaders, 7 million more jobs could be added in the six countries evaluated.
Mobile technologies are fueling economic growth, driving recovery from the global recession.
- The mobile value chain generated almost $3.3 trillion in revenue globally in 2014 and is directly responsible for 11 million jobs.
- Mobile is an engine of economic prosperity. In the six countries evaluated, mobile contributes more than $1.2 trillion in GDP. This equates to between 2 and 4 percent of each country’s GDP, and 11 percent in the case of South Korea.
- The rapid growth of mobile is poised to continue. Across the countries evaluated, mobile’s share of GDP is growing at a 10 to 20 percent annual rate and can continue or even accelerate as consumers and businesses continually discover new applications for ever more advanced mobile technologies.
The mobile industry has made massive investment in new infrastructure and R&D.
- Companies in the mobile value chain invested $1.8 trillion in infrastructure and R&D from 2009 through 2013, relying almost exclusively on private-sector funding.
- Core technology (2G, 3G, and 4G) innovators take enormous risks by spending heavily on research and development with no guarantee of return on investment. Companies focused on mobile’s core technologies invest a larger share of revenue (21 percent) in R&D than those in any other industry except biotechnology—and more than companies in all other R&D-heavy industries, such as pharmaceuticals (14 percent).
- Licensing of core technologies within the mobile industry is essential to its rapid and cost-effective advancement. Clear and cooperative licensing arrangements make it possible for companies across the value chain—and thus consumers and businesses—to access the most advanced technologies.
- Many new and start-up companies are entering the mobile sector. In the past five years, venture capital (VC) investments in mobile have doubled as a percentage of total VC investments, reaching almost 8 percent ($37 billion) in 2014.
To ensure that the mobile revolution continues and expands, policymakers must support an environment that fosters innovation and investment. Future growth of mobile depends on continuing the policies that enabled the industry to get where it is today.
- Strong patent protection is needed to encourage large and risky investments in mobile technology innovation.
- Market-driven licensing is vital in order to ensure that technology innovations can be widely shared with others in the industry.
- Industry standards are required to solve the industry’s most complex technology problems through open and meritocratic processes.
- Continuous allocation and availability of additional radio spectrum, especially more licensed spectrum, is needed to keep pace with consumer demand.
- To reap the economic benefit of fifth generation (5G) networks and beyond, mobile players will need to invest approximately $4 trillion in R&D and capital expenditures by 2020.
- Weakening patent protection, intervening in the industry-driven standards-setting process, or curtailing technology licensing will jeopardize the future of mobile.