Thursday, November 22, 2018

Will 5G Cause Economic Growth?

Correlation is not causation, it is helpful to remember. There is a correlation between higher per capita gross domestic product (GDP) and more time spent on Wi-Fi, say researchers at OpenSignal.

There also is a correlation between higher GDP and overall average mobile upload and download speeds; overall Wi-Fi download speeds; and LTE availability, OpenSignal researchers note.

Others will note that there is a correlation between GDP and fixed network internet access availability; between gross domestic product and internet access speed;  or between GDP and affordability; between 5G and economic activity.


To reiterate, correlation exists. Causation is another matter.

Does internet access cause growth, or does growth lead to better, faster, more affordable internet access? It is impossible to know.  

The same sorts of issues can be noted where it comes to Wi-Fi speed. There is a correlation between faster Wi-Fi (faster fixed network access) and GDP.


But it remains impossible to determine the extent to which better connectivity causes growth, or the extent to which growth leads to better connectivity. Put another way, does wealth lead to spending, or does spending lead to wealth? Nobody doubts the correlation. But to the extent public policy is based on perceived causation, the causal chain does matter.

“Necessary but not sufficient” often is the best formulation. Quality internet access might be necessary for economic growth, but is not sufficient to cause it. Good communications might be necessary to attract firm foundings, relocations or expansions. Rarely, if ever,  is it sufficient.

Good internet access is an aid to quality education or prevent population loss. It is not sufficient to cause educational quality or prevent population loss.

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