Mobile Adds More Jobs, More Revenues To Biz

by CXOtoday News Desk    Feb 02, 2015

jobmobile

Mobile industries generated some $3.3 trillion in sales and were responsible for 11 million new jobs worldwide in 2014, according to a new Boston Consulting Group study. The number, according to the researchers is overwhelming, indicating the steady rise of mobile technologies and the enormous benefits to consumers, small and medium-sized enterprises (SMEs), and the world economy. But the study also notes that to ensure continued innovation and growth across the global industry, mobile players will need to invest as much as $4 trillion by 2020 and overcome significant challenges, according to the report, which was commissioned by Qualcomm Incorporated but produced independently by BCG.

The research conducted in six countries, namely, Brazil, China, Germany, India, South Korea and the US highlights that the mobile technologies industry generated revenues of almost $3.3 trillion worldwide in 2014 and is directly responsible for 11 million jobs. In addition, mobile companies invested $1.8 trillion in capital expenditures and R&D from 2009 through 2013, relying almost exclusively on private-sector funding.

The SME advantage

The BCG research also surveyed 3,500 SMEs in the six countries analyzed and assessed their domestic economies in order to understand the company- and country-level impact of mobile technologies. The study shows that SMEs that adopt advanced mobile technologies increase revenues up to two times faster and add jobs up to eight times faster than their peers.

The “mobile divide”—the difference in growth between mobile leaders and laggards— is poised to increase. Closing the mobile divide among SMEs in the six countries surveyed would add 7 million jobs over the next three years and increase GDP growth by 0.5 percentage points.

Mobile technologies currently contribute more than $1.2 trillion in GDP in the six countries, which accounts for almost half of global GDP (47 percent).

“Mobile has been a huge driver of economic growth—creating jobs and improving consumers’ lives,” said David C. Michael, a San Francisco-based senior partner and a co-author of the report. “But much more innovation is still needed. Policymakers have an important role to play in sustaining innovation and R&D investment in mobile technologies.”

The growth factor

According to the BCG report, consumer adoption of 3G and 4G standards has outpaced all other technologies, growing to nearly 3 billion connections in less than 15 years and projected to exceed 8 billion connections by 2020.

Dramatic performance improvements in mobile communications standards and decreasing costs have propelled mobile to become the fastest adopted technology of all time. While mobile data transmission speeds have soared—4G networks offer 12,000 times faster data-transmission speeds than 2G networks—user costs have plummeted. Moreover, smartphones are now available for as little as $40, says the study.

The report further offers clear evidence that consumers seek advances above and beyond the currently available technology: 90 percent of 3G and 4G consumers reported they want even faster data speeds, more coverage, more battery life, and many other improvements. Many of these breakthroughs will require continuing up-front investments in R&D by the industry.

Innovation, growth challenges

To help sustain and foster an environment that will continue to support investment and innovation in mobile technologies, BCG recommends that governments and policymakers should take, including the following:

-          Incentivize technology innovators through strong patent protection and market-driven licensing.

-          Support collaborative, industry-driven standards-setting.

-          Ensure continuous allocation and availability of additional radio spectrum.

With mobile broadband connections expected to exceed 8 billion by 2020, the demand for additional capacity will continue to accelerate, states the study.