Mobile Phones And The Impact Economic Development

Published Date: 02 Nov 2017

Introduction

The first cell phone call was made almost forty years ago. In 1973, when a Motorola engineer made that first phone call, they could never have realized the impact that mobile phones would have on the world. These devices have grown from being used by just a select few individuals; to being used by almost half the world’s population and the growth rate is still climbing. These devices have had an impact on economies around the world, they have raised social and political questions regarding privacy and usage, and they have had an impact on our health and environment. This paper will take a look at these issues.

Economic

Mobile phones can impact economic development in a number of ways. They have the potential to reduce the costs of communication by lowering search costs and making information more accessible to the general population of developing countries. This, in turn, will lead to more efficient market operation by reducing the amount of waste caused by spoilage, and by facilitating communication between producers, sellers, and buyers. In addition, mobile phones can increase the economic welfare of both consumers and producers. Finally, cell phone use can stimulate the economy by creating more demand for mobile-based services, which in turn increases employment. Mobile phones also offer the potential for mobile phone-based services and products.

Over the past decade, the Internet and E-commerce have grown faster than many people could have guessed. This growth has led to new ways for buyers and sellers to communicate and conduct business. E-commerce is, "the buying and selling of goods and services on the Internet, especially the World Wide Web" (Rouse, e-commerce (electronic commerce or EC), 2005). One specialized branch of E-commerce that has grown the fastest in recent years is mobile commerce (M-commerce). M-commerce is simply E-commerce that is done through the use of mobile devices. Over the past several years, mobile commerce has emerged to become one of the hottest trends in business transactions.

According to research done by yStats.com, during 2012, the number of people worldwide that are expected to make purchases via a mobile device should reach approximately 400 million and about 40 percent of all retailers offer some kind of option to buy their goods on mobile devices. In the United States, M-commerce is developing much faster than other forms of E-commerce, especially in the travel and ticketing sector. In 2011, nearly 30 million customers in the U.S. made some kind of M-commerce purchase and over the next 3 years, that number is expected to double (yStats.com, 2012). M-Commerce is a great way to deliver products and services to customers anywhere at any time.

The increase in high speed Internet connections, supported by data-enabled mobile devices, has led to a massive growth in the use of mobile data. A recent report shows that total mobile data usage more than doubled on average every year from 2005 to 2010 in each of the 96 countries in the sample. In the United States, data usage grew by more than 400%; in Western European countries, it grew by about 350%. The report also found that in developed countries, the adoption of mobile technologies increased productivity, by enabling faster access to information where and when it is needed. In developing countries, mobile technology opened up new economic opportunities by allowing them to communicate better and have better access to information.

A recent study done by GSM Associates and Deloitte found that this availability of cellular service has numerous economic advantages. The study estimates that a doubling of mobile data use leads to an increase in the Gross Domestic Product (GDP) per capita growth rate of half a percent across selected 14 countries, and that countries with higher level of data usage have seen increases in GDP per capita growth exceeding one percent. Another study conducted in 2005 concluded that a developing country that had an average of 10 more mobile phones per 100 people enjoyed per capita GDP growth that was 0.59 percent higher than an otherwise identical country.

Another area that mobile phones have had an economic impact is through "app" sales. The market for apps has grown exponentially over the past few years and researcher In-Stat projects there will by 48 billion mobile application downloads by 2015 (Hamblen, 2011). Research firm, Gartner, Inc. said that mobile app sales topped $5.2 billion in 2010 and grew to $15.1 billion in 2011. They expect this growth to continue and reach about $185 billion by 2014 (Robles, 2011).

Finally, cell phone manufacturers have started to add near-field communications (NFC) technology and the ability to accept credit card payments using a smart phone. NFC devices allow short range communication between devices, and can be used to allow people to make mobile payments without needing to swipe a credit card. NFC payments first require you connect a bank account or credit card to some kind of system that will actually fund the transactions. Google has released the Nexus S phone with Google Wallet that allows you to make such payments at stores that support contactless swiping (Bradley, 2011). Several companies have also released apps and credit card readers so that people can accept credit card payments from customers anywhere they have a cell phone signal, the app even lets the customers sign for their purchase on the screen.

Social/Political

This section will look at some of the benefits and drawbacks of using mobile devices in today’s world. While the benefits to the technology are great and well documented, the negative aspects of this technology are seldom the focus when people discuss and use cell phones.

Mobile technology has improved people’s lives in many different ways. First of all, it has brought people closer together through texting, social networking apps, and video or voice phone calling. It provides people multiple ways to stay in contact and people can choose the most comfortable and appropriate way to remain in contact with friends and families. Mobile technology and smart phones can also provide a form of entertainment and relaxation. Smart phones, unlike the early cell phones that just made and received phone calls, can be used to surf the Internet, play games, read e-books, take photos and videos, and so on.

Another area that has greatly impacted daily lives is that people are no longer forced to stay at their desk to work, they can access work information through their phones. They don’t have to worry about the unexpected problems that occurred at work during their vacation since they can deal with it by the mobile devices distantly. Another application on work is the use of CRM system. By viewing customers’ information on the tablets or mobile phones, sales can access customers’ information wherever they are (Business link, 2012).

Mobile technology makes life easier as well. Most smart phones have built in GPS capabilities which can provide directions and maps without the need of carrying maps. In addition, people can get weather information anytime they want through the mobile devices rather than only through the newspaper, radio and TV. Generally speaking, advanced mobile technology benefits people’s lives in many ways.

Finally, the mobile phone is doing more than revolutionizing communication. It has the potential to improve the health, education, and other aspects of life in poor countries. Since a lot of the health issues in third world countries is based around the lack of information, public health experts have high expectations for the mobile phone. Hundreds of projects throughout Africa and South Asia are testing the various ways phones might make people healthier. They are conducting studies by "texting advice or sending voice messages to pregnant women, texting reminders to AIDS patients to take their meds, tracking the spread of diseases, allowing community health workers to keep records electronically, etc." (http://opinionator.blogs.nytimes.com/2013/03/13/the-benefits-of-mobile-health-on-hold/)

However, these positives can be looked at from a different perspective. While these phones offer all of these advances and benefits, they can have a negative impact on people’s lives. The overuse of technology can have a negative influence on people’s physical and mental health. With all of this information and entertainment at your fingertips, people do not have to work as hard or go anywhere to perform many tasks. People no longer have to go to the library to do research; they can do it right from their chair. Many younger people are losing the ability to communicate face-to-face and instead prefer to "talk" to their friends via text messaging.

While it is great that people can access their work from anyway, the expectation is becoming just that. Many companies expect their employees to stay connected 24 hours a day, 7 days a week. They expect people to reply to e-mails and handle issues when they are at home, on weekends, and even when they are on vacation. This takes away from valuable personal time with family and friends.

Perhaps the biggest issue with this mobile technology is privacy. A survey was done in 2012 to try and better understand the attitude people had towards the private information that is generated and stored on their mobile phones. This survey found that people considered information stored on their mobile phones to be private, at least as private as the information they keep on their home computers. Considering how people use their phones today, this may not be surprising. The problem is that losing a phone is easier than losing a computer. People store sensitive personal information such as text messages, contact lists, and voicemail on their phones, and many people with smartphones use them to perform mobile banking and other services that provide personal information, including visiting websites, using social networking services, and using location services.

In the past, when you spoke to someone on the phone, it was done either in the privacy of your home/office, or if you were out and needed to call someone, it was done in a phone booth. Now, people talk about their lives and work everywhere they are, the grocery store, the bus, etc. People are largely unaware that cell phone messages, even text messages, can end up in the hands of strangers and even on the Internet. To make matters worse, many apps on smart phones send information about the phone’s location to databases. Though such databases usually are not public, they also are not private.

This private information flows quite freely without people even knowing. Mobile phones are a good source of personal information about individuals and both private and public sector companies seek ways to collect this information. Today, the most visited websites share information, save information, and facilitate visitors’ buying and selling of personal data. Many mobile applications seek this same information plus they use location data to determine where the person is when they use the app. All of this information is stored in databases. This information is not just used by that one company, government agencies can obtain user information from Facebook, Twitter, and many other app providers and they routinely request cell phone carriers for customers’ phone records as well. A recent investigation completed by Congress found that law enforcement agencies sent over one million requests for access to wireless phone records in 2011. This has led to the Supreme Court issuing a decision that would require federal investigators and other law enforcement agencies to obtain a warrant before they could use a phones GPS to track someone.

With the existence of so many social media sites such as Google+, Facebook, Foursquare, Twitter and so forth, privacy issues should become a greater concern. Facebook recently ignited a controversy by collecting address book information from users’ mobile phones via its mobile app. Because of issues like this, a recent poll showed that 59%4 of the respondents said they had little or no trust in Facebook, to keep their information private, but they also said they use it almost daily. A study released in 2011 showed that 45% of the top 185 US web sites transmitted identity details to at least four other websites. It was discovered that one online dating website transmitted information regarding gender, zip code and age to websites which auction personal data5.

Another area of using a cell phone that is getting a lot of attention from both the public and the government over the past few years is texting while driving. Many states have passed laws regulating when and how you can use a cell phone while driving. The danger that comes when drivers take their eyes off the road to read, type, or send a message and stop paying attention to their surroundings. According to a 2011 government report, 3,331 people will killed in crashes involving a distracted driver. Additionally, approximately 387,000 people were injured in crashes which involved a distracted driver. This has caused texting while driving laws to multiply even faster than laws punishing drivers who use handheld mobile phones. It isn’t just texting that poses the problem, according to a Carnegie Melon research report, driving while using a cell phone reduces the amount of brain activity associated with driving by 37%.

Environmental

When it comes to environmental impacts, there are really two main areas to consider. The first is the effects of mobile devices on the human body. This really varies depending on the amount a person uses a mobile device and the type of device they use. The other area is the impact of mobile devices based on the emissions they give off, waste handling, and chemical compounds used in making these devices.

As a result of the large increase in mobile phone use around the world, there has been significant interest in studying the effects of the radiation given off by these mobile devices. Most mobile phones emit small amounts of electromagnetic radiation and some people believe that this radiation may be harmful to our health. This is the same radiation that is given off by many other wireless devices. Over the years, there has been a substantial amount of research done on the effects, in animals and in humans, but no relevant relationship has been made between extended exposure to cell phones and any harmful biological effects.

There have been some recent studies thought that do suggest that there may be a relationship between cell phone use and certain kinds of brain and salivary gland tumors. In a 2009 analysis of 11 different studies found in the International Journal of Oncology, Lennart Hardell concluded that using a cell phone for at least ten years "approximately doubles the risk of being diagnosed with a brain tumor on the same ('ipsilateral') side of the head as that preferred for cell phone use."

On 31 May 2011, the World Health Organization stated that mobile phone use may possibly represent a long-term health risk, classifying mobile phone radiation as "possibly carcinogenic to humans" after a team of scientists reviewed studies on cell phone safety. Mobile phones are in category 2B, which ranks it alongside coffee and other possibly carcinogenic substances. One study of past cell phone use cited in the WHO report showed a "40% increased risk for brain cancer in the highest category of heavy users (those that use a cell phone for an average of 30 minutes per day over a 10-year period)." This is a reversal from their prior position that cancer was unlikely to be caused by cellular phones and that reviews had found no convincing evidence for other health effects. Some countries, including France, have warned against the use of cell by minors due to health risk uncertainties. However, a study published March 24, 2012 in the British Medical Journal questioned these estimates, because the increase in brain cancers has not paralleled the increase in mobile phone use.

The average lifespan of a phone in the United States is currently less than eighteen months. This is bad news for a number of reasons. First, mobile phones cause far more emissions while they are being made than they do during the course of their use. In fact, despite the entire infrastructure that cellular networks require, and even factoring in considerations such as power seepage from inefficient chargers, phone use makes up only a small portion of global emissions, with a year’s typical use coming to 47kg CO2 per person. Consequently, the environmental impact of a phone is lowered the longer it stays in use. Indeed, the study ‘Life Cycle Assessment of the Mobile Communication System UMTS: Towards Eco-Efficient Systems’ predicted that retaining the same phone for four years rather than one would reduce its environmental impact by as much as 40%.

This effect is more pronounced in the case of smartphones as their production is more energy intensive than a regular handset. For instance, Apple’s latest offering, the iPhone 5, according to the Apple’s own estimates, causes 23% of its emissions through its actual use, while its production accounts for 69%. By replacing handsets often we dramatically increase the environmental impact of each phone we own.

Secondly, there’s the problem of the discarded handsets themselves. In an ideal world the people would continue using the phones until they no longer are functional and then they would be recycled. As it is, not only are we switching handsets frequently, we generally fail to recycle them. Less than 10% of phones presently end up getting recycled. As well as being terrible in terms of the volume of material that gets sent to landfill as a result, it’s wasteful in the sense that much of that material is of high value. Altogether, thanks to discarded handsets, each year we throw away 4.7 tons of gold and 29 tons of silver, which combined would be worth over $65 million!

These aren’t the only reasons that it’s far better to reduce than to recycle when it comes to phones. The production of cell phones can lead to some pretty nasty by-products. In their paper ‘Cutting Edge Contamination’ Greenpeace found that a wide range of toxic substances are being discharged from plants assisting in the manufacture of parts for phones, especially those producing printed wiring boards (PWBs) which go inside the handsets. They found that brominated chemicals and phthalate esters were being released from factories in China and other locations in the Far East. According to the report "these two chemical groups both contain chemicals that are known to be toxic, and some are also persistent in the environment" and there are concerns that wastewater from such sites can contaminate water supplies that are used in surrounding communities.

Conclusion