One often hears claims that “5G leadership” or “6G leadership” matters. It often is not clear what is meant by the assertion. At one level, it could mean that domestic suppliers are leaders in selling infrastructure. It could be the belief that faster mobile networks directly boost economic competitiveness, in part by enabling new applications or innovation.
Underlying these and other possible assertions is the link between technology deployment and economic impact and economic growth.
Nobody would doubt the existence of correlations between underlying infrastructure, human capital, investment capital, technology deployment, geography, natural resources, education, the rule of law, government policy and many other possible elements that “explain” economic growth.
But correlation is not necessarily causation, and with so many independent variables one cannot isolate one variable that explains the outcomes. So 5G or gigabit internet access networks “might” or “should” or “could” promote economic growth (beyond the actual spending to create the networks).
But we cannot say for certain, as we cannot isolate the variables, nor test them. One might as well argue the reverse: wealthy societies can afford, and will pay for, quality 5G and home broadband. In other words, wealth or existing high rates of economic development drive home broadband and 5G usage.
Population density, high educational attainment, average home values, high incomes and high per-capita income all are correlated with high deployment rates of home broadband, for example. It is more plausible to argue that wealth drives home broadband or 5G as it is to argue that home broadband or 5G drives wealth (beyond the obvious assertion that the home broadband and 5G industries themselves represent investment, jobs and income).
Economists attempt to measure the correlation between technological advancements and economic growth using “total factor productivity (TFP), a measure of total output compared to input.
The problem is that TFP is not a measure of technology alone, but also includes economic, cultural and technology elements. So TFP is pretty much a “measure” of “everything” that could influence economic growth. It is a measure of both capital and labor inputs, and not a direct measure of technology impact.
Nobody doubts that technology can enable or influence economic development. The issue is that technology deployment also happens in a context where other variables exist. And if technology deployment were an independent variable, its application should have an impact everywhere it is applied, and that does not appear to be so clear.
Then add the role of consumer expectations. If consumers fear recession, they slow spending, which then causes a recession. If consumers believe the economy will be strong, they increase spending, which causes growth.
In sum, we do not know whether 5G or home broadband necessarily “cause” economic growth. They are correlated with lots of other inputs and variables. So the claim of “leadership” has to be evaluated in that context.
Generally speaking, economic leaders also tend to be leaders in 5G and home broadband. So claims of leadership value--while clearly in the interests of the industries making such claims--might or might not actually have a direct causal role that can be isolated from all the other independent variables.
5G and home broadband are correlated with economic growth, many will argue. It is hard to argue against the correlation. But we cannot prove causation, either.
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