Mansi Tiwari in The Economic Times reports that a study titled ‘India: The impact of mobile phones,’ conducted by the Indian Council for Research on International Economic Relations (ICRIER) has found a quantitative relationship between mobile penetration and economic growth –
Indian states with 10% higher mobile phone penetration will enjoy 1.2% higher annual average growth rate than those with a lower teledensity.
The real benefits of telecommunications only start when a region passes a threshold penetration rate of about 25%. Many areas have still not attained that level.
Delhi’s penetration rate is in excess of 100% but states such as Bihar, Orissa, Assam and Madhya Pradesh have not yet reached the critical 25% threshold.
In another study, London School of Economics professor Leonard Waverman had found that 10% extra mobile penetration may result in as much as 0.6% of additional GDP growth.
I’m sure that increased mobile penetration does lead to higher economic growth. However, the converse is even more true: more economically developed countries or states often have higher mobile penetrations. It’s easy to predict that higher mobile penetration will lead to higher economic growth; it’s more difficult to show how to increase penetration in the first place.
Cross-posted on International Values and Communications Technologies.
