Mobile phones - the impact on the economy, society and our personal lives

Mobile phones have changed how we negotiate our relationships with family, spouses and close friends. Increased levels of mobile phone subscriptions are linked with improvements in education, gender equality and political participation, particularly in developing countries. They are also associated with higher economic growth.

These are among the findings of a research report by the Cologne Institute for Economic Research, which explores the ways in which mobile technologies influence economics, society and people’s private lives across 10 countries – the UK, Germany, Italy, Spain, China, India, Turkey, Egypt, Kenya and South Africa.

The report – ‘Mobile Technologies: The Digital Fabric of Our Lives’, commissioned and published by the Vodafone Institute for Society and Communications – bases its findings on numerous sources, including interviews with 10 top academic researchers and a worldwide survey of Vodafone country experts. Among the findings:

1. Relationships: Mobile phones have altered our relationships with family, spouses and close friends. But while they seem to promise a wider social network, more than half of the average person’s calls and texts go to only four to six different people.
2. Health: Mobile phones significantly help to maintain physical and psychological health when family members move away from home. And they enable women to maintain three roles within the household, simultaneously being wives, mothers and wage earners.
3. Political participation: More mobile phone subscriptions are correlated with more democratic participation, less gender inequality and longer time spent in education. In all three areas, the impact of mobiles on social development indicators is stronger in developing countries.
4. Economic growth: Mobile technologies contribute significantly to GDP growth, with a forecast range of between 1.8% in the UK and 24.9% in Egypt over the years 2010-2020, compared with today’s GDP. Again, the effects will be larger in developing countries.

The growth impact in more detail:

The effects of increasing mobile phone subscriptions on GDP growth across 10 countries are all positive for the years 2010 to 2020, forecast to grow continuously in this period. They range between 1.8% in the UK and 24.9% in Egypt (compared with today’s GDP).

Mobile phones enable new services and applications that provide opportunities to generate income. Furthermore, the access to information and increased communication through mobile communication facilitates coordination resulting in productivity gains. Mobiles also enable immediate responses to crises and shocks that without them may lead to destruction of crops or machinery.

The effects tend to be larger in developing countries. This is explained by the significantly higher growth rates of mobile phone subscriptions in these countries. In practice, mobiles fill the gap that other poor or non-existent infrastructure in these countries leave wide open. So it is not surprising that many innovations related to mobiles are adopted more quickly in developing countries. Mobiles are also often the first and only way of communication without having to travel under difficult circumstances.

In developed countries, there are smaller effects for mobile phone subscriptions on growth. In these countries, effects are likely to be less pronounced due to less growth in mobile phone subscriptions in forthcoming years and generally good infrastructure.