PPI Chief Economic Strategist Michael Mandel brought forward one very important fact yesterday at the Institute for Policy Innovation’s “Creating the Future” Summit: for the first time, the communications sector will shape the economic recovery and drive future economic policy. At the summit, Mandel explained how the sector drove investment in innovation and added jobs over a period where total net investment dropped 50 percent and millions of jobs across other sectors were lost. Mandel’s recent study on the “App Economy” estimates at least 500,000 jobs have been created since 2007 by the explosion of apps.
Mandel argued that the future importance of the communications sector during the next expansion follows historical trends—in previous downturns the sectors that brought the economy back to life also drove the subsequent expansion. And of all the sectors that could be fueling the next economic boom, communications—a sector whose innovations have transformed how we live and our quality of life—is a good sector to have in this position.
Mandel emphasized that innovation is the lifeblood for economic growth, and should be nurtured in any way possible. That means it’s essential government policies keep pace with the dynamic, integrated structure of the communications sector, where the ability to bring products to market on a large scale is critical to meeting consumer demand. In that vein, unused and underused spectrum should be auctioned off to the wireless service providers best equipped to quickly and efficiently get it to customers, regardless of how much spectrum a company currently owns. Future innovations in wireless communication should be facilitated through a network of public and private funding partnerships. And, although controversial, regulatory agencies should consider enacting a countercyclical regulatory policy that relaxes regulations during recessionary innovation booms and re-tighten regulatory requirements once the economy is fully recovered.
