The Wireless Industry: Revisiting Spectrum, the Essential Engine of US Economic Growth

The wireless industry is making a greater impact on America than ever before. The world is becoming hyper-connected, with smart phones, smart meters, smart houses, smart cities, smart businesses and smart people all relying on the fast connections that the wireless industry provides. In just four years, the wireless industry’s contributions have grown dramatically. For example:

  • In 2014, the wireless industry generated $194.8 billion of domestic economic value(excluding imports and exports) in the US, up 34% from 2011.
  • In 2014, the US wireless industry generated $282.1 billion in US GDP, up 44% from$195.5 billion in 2011.
  • The industry’s global economic impact has grown at a breakneck speed to $332.9 billion,an expansion of 71% since our last report.

This report looks at the effect of the US wireless industry on the US and global economies and provides a hint of the developments we’ll soon see if the government continues to provide additional spectrum. We also examine the current consumer surplus, its significance and the historical trends. The overall annual wireless consumer surplus in the US today—measured across voice minutes of use, SMS, and data usage—is $640.9 billion.

Underscoring its essential place in today’s society, the wireless industry is now larger than the computer systems design industry, legal, publishing (including software), agriculture, petroleum and coal production, and other storied sectors which themselves are benefiting from wireless.

As the wireless industry has grown, it has become the midwife of countless new businesses—conceived from the fertile minds of American entrepreneurs—that sprouted where nothing existed a few short years earlier. Apps, which were a $10 billion phenomenon in 2011, became a $36 billion juggernaut in 2014. But apps haven’t gotten there entirely by themselves. Wireless operators are more indispensable than ever because without the connectivity they provide none of this would be possible.

That constant wireless network connection makes smart phones and the fast-growing app economy soar. Think for a moment about mobile health apps, which make a daily, if not hourly, difference in the lives of millions of people. That would not be possible without a constant wireless connection and available spectrum.

The most remarkable thing about the wireless industry is that even after the amazing growth we chronicled between 2011 and 2014, the industry is still only on the threshold of what’s possible with the marriage of high-quality, super-fast mobile connections and billions of devices.

In the not-too-distant future, 5G will usher in a new era of even faster wireless broadband connections everywhere, anytime. Video will be even easier to access, smart vehicles and transportation will be revolutionized, virtual reality will expand beyond theory and gaming to commercial applications, and the Internet of Things will fundamentally transform entire industries like shipping, health, transportation, insurance and more. The ability to control critical devices from anywhere and improve our quality of life will be nothing short of amazing. IoT will have societal impacts that will exceed the current impact of social media.