The latest estimate of the annual contribution of the geospatial industry to the world economy of US$400 billion represents a substantial increase over a previous estimate of US$150-270 billion released in 2013. Both reports agree that the total contribution of geospatial data and technology annually to the world's economy is to be calculated in trillions of US dollars. There is evidence that geospatial's contribution is increasing.
AlphaBeta used consumer surveys from 22 countries, big data analysis of online job postings and other analytics to determine the impact of geospatial data, technology and services on the world economy. The study (The Economic Impact of Geospatial Services, AlphaBeta, September 2017) estimates that geospatial services generated annual revenue of US$400 billion per year in 2016 - this directly contributed to increasing the world's GDP. In addition geospatial data, technology and services save time and fuel for the travelling public - this contributes to increasing labour productivity. The study estimates that these efficiency benefits save the public over US$550 billion per year. Together the contribution in efficiency gains and direct revenue are estimated to reach almost a trillion US dollars. This is viewed as a conservative estimate of the contribution of geospatial to the world economy since the study was able to quantify only a few of the ways that geospatial data, technology and services benefit the economy. The ways that AlphaBeta was able to quantify in which geospatial contributes to the world economy include productivity gains for the travelling public, direct revenue generated by the geospatial industry, and revenue gains and cost savings in other industries from using geospatial data and technology.
Productivity - digital map data and technology shorten traveling time by 12% (estimated to be worth US$ 264 billion). It also saves US$ 20 billion in fuel. Geospatial also enables consumers to make buying decisions faster, saving more than 21 billion hours (estimated to be worth US$283 billion).
Direct revenue - the geospatial industry generates US$400 billion in revenue per year.
Indirect revenue and savings - the study suggests that the increased revenue from geospatial-enabled services is several times higher that direct revenue to the geospatial industry. For example, the study estimates that digital maps drives US$1.2 trillion of sales worldwide. Furthermore the study estimates that geospatial technology improves revenues and costs by at least 5 percent in sectors contributing more than 70 percent to global GDP, for example, retail and mining. This has an estimated value of about US$2.7 trillion.
Other non-quantified benefits - other benefits that are difficult to put a price tag on include creating 4 million jobs, reducing automobile emissions by 1,686 million metric tons, reducing emergency response time by up to to 20% in some countries, and improving emergency preparedness.
To put this in context, according to a report prepared by the Boston Consulting Group (BCG) in June 2012 the geospatial services industry in the United States generated annual revenues of $75 billion. The BCG report estimated the economic impact of the geospatial services industry on government, business, and consumers to be $1.6 trillion in revenues (greater efficacy) and $1.4 trillion (about 8.7% of the U.S. GDP) in cost savings (greater efficiency). In 2013 Google released a report What is the economic impact of Geo services ? prepared by Oxera Consulting Ltd. Global revenues from geospatial products and services as defined by Oxera was estimated to be $150-$270 billion per year. The $270 billion estimate was computed by scaling up the BCG estimate for the United States to the world economy. The latest report considerably increases the estimated direct revenue to the geospatial industry, but is inline with the 2013 report in estimating that the total benefits of geospatial to the economy lies in the range of several trillions of US dollars. The improvements in revenue and costs in all industries which use geospatial data and technology is estimated to amount to roughly 3% of the world's GDP.
For comparison the most quoted estimate of geospatial data an technology to a national economy is a 2008 a report prepared for the CRCSI & ANZLIC by ACIL Tasman estimated that the spatial information sector contributed between 0.6% and 1.2% of the Australian GDP in in 2006-2007. The recent Google results suggest that the proliferation of geospatial data and services has increased the penetration of geospatial in the world's economy.
There is other evidence that geospatial is proliferating in the world's economy. McKinsey has estimated that by 2020 the benefits (difference between willingness to pay and the cost of applications) that customers, consumers and businesses, will enjoy from location-based applications will reach as much as US$700 billion/year. Most of this, about 70 %, will be the consumer benefit from time and fuel saved by using GNSS navigation systems including those with real-time traffic information and mobile LBS applications. The remaining 30 % of the benefits will be through location-enabled applications such as geo-targeted mobile advertising. Smart navigation applications are estimated to provide $500 billion in value to global consumers in time and fuel saved by 2020. Geo-targeted advertising could represent more than 5 percent of total global advertising spending by 2020.
A major industry where geospatial is already having a significant impact which may accelerate is construction. Globally construction is expected to grow by almost 70% from $7.2 trillion today to $12 trillion by 2020. Construction productivity has been stagnant in many advanced economies for decades. It has been slow to adopt process and technological innovations and its R&D spending has lagged other industries. In a recent report, Imagining construction’s digital future, McKinsey suggests compelling reasons why the construction industry is ripe for disruption and how digitization might contribute to its transformation. Two of the technologies that McKinsey identifies that will be key in the anticipated transformation are geospatial and BIM.
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