Socio-economic impact research
Since 2004, our research on the socio-economic impact of mobile (SIM) has aimed to provide systematic analyses of the impacts of mobiles in key areas. These can be used to help policymakers provide a regulatory environment that stimulates growth and economic development. The SIM project has covered three key areas relating to access to communications in emerging markets so far.
Impact of mobile in Africa
The first set of studies explored the impact of mobile in Africa, where mobile use has grown rapidly over the past few years. The work, published in 2005, documented the boost to economic growth from greater mobile penetration and found that, even in remote rural communities, there were fewer barriers to the use of mobiles than might have been expected. Mobile technology can play a vital role in bridging the digital divide, particularly in rural areas where there is limited access to other forms of communication such as roads, postal systems or fixed-line phones.
The studies analysed data from 1996 to 2003 and concluded that a developing country with an average increase of 10% mobile penetration showed 0.59 percent higher growth in Gross Domestic Product (GDP) than an otherwise identical country. This study was replicated by Deloitte in 2007 using more recent data, which found that a further 10% increase in mobile penetration would produce an additional 1.2% increase in annual GDP growth rate. This shows that increased mobile penetration has a significant impact on GDP growth.
Read the full findings of the study.
Economic empowerment through mobile
The SIM project went on to assess the socio-economic impacts of specific products and services in emerging markets. This includes looking at the evolving role of mobiles in micro-payments, the transmission of relatively small sums of money and the provision of some basic banking services in countries where few people have any access to the security and convenience of a bank. This is a live issue for policy makers concerned about economic and social development, especially in countries with many migrant workers overseas. See our CR Dialogue on the Economic Empowerment through Mobile.
Impact of mobile in India
Our SIM study on the socio-economic impact of mobile in India, published in 2008/09, found that GDP in Indian states with higher teledensity (mobile penetration) can be expected to grow faster than states with lower teledensity, at a rate of approximately 1.2% per 10% of teledensity. The research, conducted by the Indian Council for Research on International Economic Relations, suggests that a threshold teledensity rate of at least 25% must be achieved before the full impact of mobiles on economic growth is experienced.
The study also highlights that while access to telecommunications can facilitate development, it will not in itself alleviate poverty. Complementary skills and other infrastructure, such as agricultural techniques and tools, and better roads and storage, are also vitally important. When combined with these, mobile telephony can help improve labour productivity, a key element of poverty reduction.
Read the full findings of the study.
SIM Panel
The areas of research were decided in conjunction with the experts on the Vodafone Advisory Panel, a group of academics, officials and NGOs, chaired by Diane Coyle of Enlightenment Economics and University of Manchester.