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Report  | June 2011

The Economic Benefits of Commercial GPS Use in the U.S. and the Costs of Potential Disruption

By Nam D. Pham, Ph.D.

The commercial applications of GPS generate a large share of economic benefits for society. The direct economic benefits of GPS technology on commercial GPS users are estimated to be over $67.6 billion per year in the United States. In addition, GPS technology creates direct and indirect positive spillover effects, such as emission reductions from fuel savings, health and safety gains in the work place, time savings, job creation, higher tax revenues, and improved public safety and national defense. Today, there are more than 3.3 million jobs that rely on GPS technology, including approximately 130,000 jobs in GPS manufacturing industries and 3.2 million in the downstream commercial GPS-intensive industries.

The commercial GPS adoption rate is growing and expected to continue growing across industries as high financial returns have been demonstrated. Consequently, GPS technology will create $122.4 billion benefits per year and will directly affect more than 5.8 million jobs in the downstream commercial GPS-intensive industries when penetration of GPS technology reaches 100 percent in the commercial GPS-intensive industries. As is the case in all other innovative industries, the GPS industry directly creates jobs and economic activities, which spur economic growth. Evidence shows that innovative industries, such as the GPS industry, create both high- and low-skilled jobs during economic expansions and downturns, pay their employees higher-than-national-average wages, raise output and sales per employee, increase U.S. competitiveness, which is reflected in increased exports and reduced U.S. trade deficits, and spend large sums on R&D and capital investment. In addition to creating these direct economic benefits, innovative industries create productivity benefits to the downstream industries, including increased sales, profits, and investment returns. Empirical studies have shown sustained productivity benefits support further growth and job creation in downstream industries and the U.S. economy as a whole.