More than 3.3 million U.S. jobs in agriculture and industries rely heavily on Global Positioning System (GPS) technology and the disruption of interference with GPS posed by LightSquared’s planned deployment of 40,000 ground stations threatensdirect economic costs of up to $96 billion to U.S. commercial GPS users and manufacturers, according to an economic study released today.
The study by Dr. Nam D. Pham of the Washington, D.C.-based NDP Consulting Group warns of “serious economic repercussions for the U.S. economy” if LightSquared’s plans proceed and points out that the $96 billion economic figure represents the equivalent of 0.7 percent of the U.S. economy. The $96 billion figure is the total of up to$87.2 billion in costs to commercial GPS users and up to $8.8 billion in costs to commercial GPS manufacturers. The commercial benefits of GPS are largely enabled by high precision GPS technologies.
The study states that the commercial adoption of GPS continues to grow at a high rate and is expected to annually create $122.4 billion in benefits and grow to directly affect more than 5.8 million jobs in the downstream commercial GPS-intensive industries. The study makes clear that its analysis is confined to the economic benefits of GPS technology to commercial GPS users and GPS manufacturers, mainly high precision GPS users, and the economic costs of GPS signal degradation to only those sectors. The report therefore does not capture the considerable benefits and costs to consumer users of GPS, other non-commercial users and military users.
The analysis shows that GPS equipment revenues in North America in the 2005-2010 time period averaged $33.5 billion per year and that commercial sales accounted for 25 percent of the total, while the consumer and military markets respectively made up 59 percent and 16 percent of the total. The report notes that the U.S. government has already invested $35 billion in taxpayer money in the GPS satellite constellation and continues to invest in GPS at a rate of about $1 billion a year.
Referring to LightSquared’s plans, the report states, “The commercial stakes are high. The downstream industries that rely on professional and high precision GPS technology for their own business operations would face serious disruption to their operations should interference occur, and U.S. leadership and innovation would suffer.”
The analysis and views in the study, which was commissioned by the Coalition to Save Our GPS, are solely those of the author, Dr. Pham, a managing partner of NDP Consulting Group who was formerly a Scudder Kemper Investments vice president, chief economist of the Asia region for Standard & Poor’s DRI and World Bank economist.