The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact

The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact

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The Mobile Revolution: How Mobile Technologies Drive a Trillion-Dollar Impact

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  • Big and Making It Bigger

    In its brief history, mobile has already had a sweeping impact on the global economy, businesses small and large, and consumers nearly everywhere. As we enter the next stage of the mobile technology revolution, we encourage policymakers to help sustain and foster an environment that will continue to support investment and innovation in mobile technologies.

    The policy agenda we recommend focuses on three key goals: incentivize investment and innovation; expand access to services and devices; and promote adoption and usage of mobile technologies.

    Incentivize Investment and Innovation

    The mobile industry has been propelled by hundreds of billions of dollars in up-front, risky, R&D investments. The following policy recommendations are designed to encourage continued investment in innovation.

    Incentivize technology innovators through strong patent protection and market-driven licensing. Technological innovation is research intensive. In order to innovate, compete, and drive the next generation of mobile technologies, companies must invest enormous sums in research and development. Much of this investment is poured into technologies that never reach the market. For those technologies that do, it is critical to have a predictable and market-driven process for licensing IP. As noted earlier in this report, mobile players invested an aggregate of $1.8 trillion in capex and R&D from 2009 through 2013 and are expected to invest approximately an additional $4 trillion between 2014 and 2020. Such heavy, sustained, up-front expenditures require patience, confidence, and a significant assumption of risk.

    Policymakers can support these tremendous private investments by ensuring that a robust IP framework is in place to protect patent rights and facilitate market-driven licensing. Weakening patent protection would reduce the incentives currently motivating innovators to develop technologies essential for transition to 5G and beyond. These protections help safeguard hard-won innovations and enable companies to obtain a return on their investment in innovation.

    Support collaborative, industry-driven standards-setting. Standards-setting bodies in telecommunications play a vital role within the mobile industry. Industry standards promote interoperability across the entire mobile value chain; reduce technology risk and lower costs for manufacturers and network operators who must commit to emerging technologies; and deliver a frictionless experience for end users.

    The mobile industry governs itself through standards-setting bodies and should be encouraged to continue this historically effective self-governance. The private sector has led the way in order to ensure that mobile technologies solve critical industry challenges, function smoothly across geographies, and promote interoperability for all players across the mobile value chain.

    Support an environment that fosters experimentation. The proliferation of sensors and connectivity—across devices and machines—will create new consumer and industrial applications that are hard to imagine today. To effectively take advantage of these digital innovations, companies, governments, and individuals need to have an open mind and a bias toward experimentation. Policymakers can support industry-driven standards for complex new technologies—such as machine to machine and the Internet of Things—and avoid unnecessary regulations or policies that limit technological experimentation on behalf of these emerging technologies.

    Expand Access to Services and Devices

    Consumers in both developed and emerging markets are embracing mobile like never before. To expand access to devices and services, policymakers should take action to allocate additional spectrum, encourage vigorous private investment in infrastructure, and support measures that bolster interoperability.

    Ensure that adequate spectrum is available for mobile. The amount of spectrum currently released for mobile communications is far less than that required to support future growth in mobile data traffic. Technology has helped overcome similar constraints in the past, and it will no doubt continue to do so, but governments and operators also need to do more to alleviate issues of availability, allocation, and harmonization that constrain the ability of various participants in the mobile ecosystem to invest in infrastructure and deliver services. (See Delivering Digital Infrastructure: Advancing the Internet Economy, a report by The Boston Consulting Group and the World Economic Forum, April 2014.)

    Ensure that levels of regulation for network operators are appropriate. Capital investments in networks are critical to consumer adoption of mobile devices. New infrastructure and network upgrades can spur greater adoption and transform the user experience. It is important that regulation supports the delicate balance of simultaneously encouraging investment among network operators, while also promoting competition to ensure consumer choice and affordable solutions.

    Reduce barriers to trade. Tariffs increase prices for imported goods and artificially raise prices for businesses and consumers. Higher prices make imported devices and technologies less accessible to a population. To ensure that businesses have the tools to compete at peak global productivity levels, and that consumers benefit from the most advanced devices and technologies, prices for imported goods should correspond to world market prices. Removing quotas and import taxes, such as tariffs, supports free trade in mobile devices.

    Encourage the growth of the digital-services ecosystem. Governments should encourage investment and growth within the digital-services sector. Robust fixed and mobile infrastructure, healthy environments for VC investments, and innovation-friendly business environments are all key factors in a dynamic digital-services ecosystem. In addition, policies that support high-tech education will ensure that highly skilled employees are prepared to contribute to the growth of mobile technologies.

    Promote Adoption and Usage of Mobile Technologies

    To ensure that the mobile revolution continues and expands its powerful economic and social impacts, governments and policymakers must take action to promote adoption and usage of mobile technologies among businesses and consumers.

    Transparent data management and privacy protections. While personal data can be enormously valuable to unlocking economic and social benefits, individuals and societies have the right to determine how their personal data will be used. Without this trust, consumers will be significantly less inclined to use mobile technologies to the fullest extent possible.

    Consumer confidence in data protection will be increasingly important in the ever-expanding “smart” society in which personal data are generated and collected by a proliferation of devices and services. Existing policies currently do not address future applications of mobile that are fast becoming a reality. Policies are needed to protect consumer data against intentional or unintentional security breach or misuse.

    Experiment with eGovernment and mobile government services. Companies, governments, schools, hospitals, not-for-profits, and nongovernmental organizations, among others, increasingly realize they need to interact with their constituencies—not just online but via smartphones and tablets. Policymakers should encourage policies that promote adoption of mobile devices by these organizations.

    The mobile industry stands out and can be a model for other industries for how innovation and market-driven collaboration can lead to massive opportunities for growth and impact.

    The impact of mobile is unprecedented. It has lifted the global economy, created millions of new jobs, and changed billions of people’s lives for the better in record time. Mobile technologies have become a cornerstone of the present and future global economy, both as an industry in its own right and as an enabler of opportunities in every sector.

    Despite the enormous investments that have already been made in mobile technologies, we are still at the dawn of mobile’s history. For this industry to sustain its extraordinary impact on jobs, economic growth, and technological progress, enormous levels of innovation are still needed. This innovation will drive the next generation of devices, create new growth opportunities for mobile players across the value chain, and ensure that the promise of the mobile revolution is fully realized for SMEs and consumers. Governments have thus far served the mobile industry well by incentivizing innovation and investment. If supportive policies continue, we have no doubt that the mobile revolution will continue, and expand, and drive unprecedented growth for many years to come.