The cellphone: a revolution in connectivity and in everyday life

Marin Cooper is regarded as the Cellphone´s Father for introducing the first radiotelephone in 1973 in the United States. The radiotelephone was widely accepted so, after a few years, the service began to be saturated. That’s why, in order to make room for more users, other forms of multi-channel access were developed and implemented. The transition from analogue to digital access had started.

The story continued in 1979 with the 1G mobile telephony, which was analogue and only useful for phone calls. It was not until 1990 when the digital access arrived, with the introduction of the 2G mobile telephony. This system already contained sophisticated protocols and coding systems that are used until now in current cellular telephony. Nowadays, 3G is characterized by the convergence of voice and data wireless Internet access, i.e., it is suitable for multimedia applications and high data transmissions. The fourth generation mobile phone technologies, 4G or LTE, is the successor of 2G and 3G technologies and its main improvement is the speed. For example, a game of 20MB can now be downloaded in just 25 seconds, when the previous technology lasted no less than 3 minutes.


It is estimated that up to end of the year will be almost 7,000 million cellular telephony subscriptions, corresponding to 96% of the world population. About 91% of the people between 18 and 25 years old have a smartphone, 87% between 26 and 35, 75% between 36 and 45, and 67% between 46 and 55. This means that connectivity has really increased. Almost all of us have a very powerful computer in our pocket or purse. So, we are able to talk to each other in any moment and in any place of the world. Communication prices has gone down very rapidly. Finally, thanks to the camera that was added to the mobiles, we are also able to show all our friends and contacts what we are doing right now.

The productivity of the economy has improved thanks to the introduction of the cellphones and its capacity to connect to the Internet. This is because connectivity is much easier, so the time and the costs to do so are much lower than before. However, cellphones may have a negative impact on productivity too. Many workers spend a lot of time chatting or posting. In any case, the balance is clearly positive, even more if we consider how markets and exchange possibilities has increased. Now we can buy almost everything, e.g., while we go to work, from almost any place of the world and asked the product to be brought to our home. The reduction of time and cost of connectivity are related to internal economies of scale, while the bigger markets are related to external economies of scale.

The cellphone is clearly not a public good itself. This is not because they are usually provided by private firms, given that public goods are independent of who provides them. They are defined by two particular characteristics: non-rivalry and non excludable. The cellphone is rivalry (if someone is using it, nobody else can use it too) and excludable (if someone does not pay for the cellphone, he / she will not have one). However, the knowledge needed to produce the cellphone, as every knowledge, is a public good. It is non-rivalry because if someone learns how to do it, nobody loses this knowledge. And it is non-excludable because the knowledge is already generated, so nobody who spends the time studying can be excluded. But, the patents are a way the State have to make the knowledge excludable and, thus, a private good. This is done to generate the incentives for the companies to invest in research and development (R&D) and then to improve the productivity of the whole economy. Another way the public sector has to encourage the R&D activities is to subsidize the companies that invest or to invest directly itself.

The cellphone has probably accelerated the growth rate of the world. On the one hand, because the production of the devices and all the related goods and services, such as screen protectors, chargers, batteries, selfie sticks, etc. On the other hand, because the higher productivity previously mentioned. It might also encourage the creation of new jobs, given the higher activity level and all the workers needed for the production of the devices. However, some jobs are replaced by the cellphone, such as employees of the landlines companies or of the shops (if many people buys in Internet via the cellphone, then less workers are needed in the shops). But, again, the balance might be positive and, in any case, skilled jobs are created, while unskilled jobs are destructed.

To sum up, the invention of the cellphone has generated a really important revolution in connectivity, as well as in everyday life. Nowadays, almost everyone has a cellphone, which are used not only for communicate each other easier and cheaper, but also for taking pictures, surfing in the Internet, buying, selling, and so on. Even though some people spend a lot of time chatting or posting with the phone, productivity might have increased since the cellphone appeared. That is why, it might accelerate the growth rate of the world, not only in the electronic sector, but also in every sector that uses this kinds of devices in the production process. Employment might gone up too, mainly skilled ones. For all this, the public sector should encourage the technological advance in the production of this devices. It can invest itself in the sector, subsidize private companies to the investment in R&D or give them patents for the innovations. In the last case, the investment in R&D of private companies will be profitable because they will be the only ones to use the innovation or they will be able to get paid for the use of the other companies.

Finally, the cellphone has had a positive impact on the economy as a whole. The challenge, as always in economics, is the distribution. In this case, the objective should be that everyone in the world has access to a cellphone and the improvement in connectivity it generates.

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