The Macroeconomic Impacts of Galileo

Daniel Arthur, Bryan Jenkins, G. Nick von Tunzelmann and Jon Styles

Abstract:	GNSS is becoming a pervasive enabling technology throughout the world for an increasing range of applications, predominantly in the transport and personal mobility domains. The economic activity involved in implementing the satellite systems themselves, both space and ground segments, will benefit industry by several billions of euros over the next ten years. Even so, the associated revenues resulting from downstream market activities – production of navigation related goods and services for all the user communities is expected to exceed the system implementation benefits to industry by at least an order of magnitude. However, the full economic impact of GNSS assessed in the study go far beyond even these large direct industrial supply-side and user benefits that are the normal indications from Cost Benefit Analyses. Satellite navigation technology is a trigger to innovation and has valuable indirect spin-offs that affect many parts of the global economy. Macroeconomic analyses using input-output metrics show that a GNSS-based industry has a highly diversified impact across many other industry sectors. Initial analysis suggests that the magnitude of such ‘market externalities’ impacts would be at least twice the direct effects, even without allowing for indirect social consequences. It is apparent that the impact of these industry sectors, either in regard to their own inputs or to their outputs (or both, as for telecommunications), is highly diversified across other sectors. Thus GNSS can be regarded as a generic or General Purpose Technology (GPT). GPTs have wide application and scope for ongoing improvement and become adopted on the supply-side of markets in diverse sectors. They often also foster complementary innovations and are also characterised by other social changes. GNSS is like the Internet and Information and Communication Technologies in that it is a service enabler rather than just a distinct product or process in its own right. Wealth creation from GPTs is realised not so much when GPTs are invented as when they are diffused widely across industry.
Published in:	Proceedings of the 18th International Technical Meeting of the Satellite Division of The Institute of Navigation (ION GNSS 2005) September 13 - 16, 2005 Long Beach Convention Center Long Beach, CA
Pages:	381 - 389
Cite this article:	Arthur, Daniel, Jenkins, Bryan, von Tunzelmann, G. Nick, Styles, Jon, "The Macroeconomic Impacts of Galileo," Proceedings of the 18th International Technical Meeting of the Satellite Division of The Institute of Navigation (ION GNSS 2005), Long Beach, CA, September 2005, pp. 381-389.
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