Over the years, I’ve written repeatedly about the role of innovation in creating jobs. Industries with stagnant innovation lose jobs to more dynamic competitors, while innovative industries lead the jobs parade. For example, in July 2010 I wrote a paper entitled “The Coming Communications Boom? Jobs, Innovation and Countercyclical Regulatory Policy”, where I argued that the communications sector is going to be the jobs leader in the current expansion:
Today, the broad communications sector is an innovation success story in an otherwise sluggish economy. And that success feeds on itself. The Internet companies have access to bigger potential markets as the broadband providers deepen and extend their networks. The broadband companies benefit from innovative applications that drive traffic and demand. And the applications developers, small and large, are able to take advantage of new capabilities.
This interconnected and self-reinforcing collection of industries is reminiscent of the early stages of past booms, which were never driven by a single industry. In this case, the employment expansion of several communications-related industries, despite the overall weak labor market, is a sign that the broad communications sector is going to be a leader in the coming recovery.
Now there’s a new study from Rob Shapiro and Kevin Hassett which provides confirmation of this thesis, as it applies to 4G.
we find that the adoption and use of successive generations of cell phones from April 2007 to June 2011, supported by the transitions from 2G to 3G, led to the creation of more than 1,585,000 new jobs across the United States. Moreover, every 10 percentage point increase in the penetration rate of 3G and 4G phones and devices occurring as we write today — in the last quarter of 2011 — should add 231,690 jobs to the economy by the third quarter of 2012.