Information is the key to defeating COVID-19

admin Tech Note

The chief constraints on the world are physical and temporal. Abundant information, however, helps us evade and sometimes conquer these facts of life. Without the internet, life in the middle of the COVID-19 pandemic would be far nastier and more brutish, even more solitary, and shorter, too. 

Medical staff arrive with a patient affected by COVID-19 at a hospital in Liege, Belgium, March 23, 2020 – via REUTERS

In our current predicament, the fundamental shortcomings of space and time are amplified. SARS-CoV-2 can’t replicate without our cells and our proximity to each other. So we separate for a period longer than the viral lifetime. Yet our bodies need calories, and time does not stop for debts and rents to be paid. 

So we must buy time with information

Extreme physical dis-connectivity requires extreme virtual connectivity. The speed of the virtual scale-up has been impressive. Teachers have adroitly shifted to meet with 30 million school children online. Colleges the same. Zoom video conferencing has spread faster than the virus, and Microsoft Teams added 12 million users in just one week, growing by more than a third to 44 million. Communities are leveraging social networks to support neighbors in a crunch. The government is (finally!) allowing doctors and patients to use FaceTime and Skype for remote video check-ups. The American internet infrastructure has handled increased demand admirably, with internet service providers and mobile carriers adding capacity and suspending data usage limits. 

Not every activity can be replicated online, however. And so we call on the wealth generated by our information-rich economy. Cash infusions, liquidity, loans, and forbearance can smooth away the sudden halt of face-to-face work — at least for a time. Massive investments in hospitals and medical supplies will save many of today’s ill, and tomorrow’s too. Wealth in a very real sense is resilience

But wealth must be constantly regenerated. We can only rely on past productivity for so long. And so we must get back to work — as quickly as possible, in as many places as possible. 

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5G wireless and the potential for higher-revving productivity

admin Tech Note

Last week, Federal Communications Commission Chairman Ajit Pai outlined his plan to auction a huge swath of wireless spectrum known as the C-band. It was a tricky dance because Pai had to find a compromise among satellite firms that currently (under)utilize the spectrum (to beam video and audio content to broadcasters and others) and would like to sell much of it, mobile carriers that would like to buy it for their 5G wireless build-outs, and various political factions who have their own ideas about how to manage the airwaves. 

It looks like Pai’s plan has attracted enough support to auction 280 megahertz (MHz) of spectrum by December 2020. The C-band is attractive because of both its size, which offers lots of capacity, and where it sits on the frequency map, which fills a key strategic role in new 5G network architectures. The additional 280 MHz could nearly double the total existing spectrum now deployed by all major mobile carriers. This particular auction is just one part of a much larger big-bang of spectrum availability.

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Mobile broadband: A (still) under-appreciated economic miracle

admin Tech Note

New research continues to demonstrate that information technologies are even more economically powerful than official data suggest. Over the past five years, I’ve attempted to show that we have underestimated the price declines and performance improvements in smartphones. (See, for example, “The A12 chip: Estimating innovation with iPhone prices,” in which I estimated that it would have cost $28 million to purchase the basic building blocks of an iPhone XS in 1991.) Last summer, the Bureau of Economic Analysis (BEA) partially acknowledged this when it revised its historical price and output figures for mobile phones, cloud computing services, and internal software development.

The BEA’s revision was in part based on excellent work by the Federal Reserve’s David Byrne. Now Byrne and other economists are putting even more analytical meat on the bones. In the process, they are once again dramatically raising estimates of the economic impact of smartphones and internet services.

In newly updated work with Carol Corrado, for example, Byrne seeks to capture missing value from broadband connectivity and content flowing over these networks. His bottom line is that “the innovations boost consumer surplus by nearly $1,700 (2017 dollars) per connected user per year for the full period of this study (1987 to 2017) and contribute more than 1/2 percentage point to US real GDP [gross domestic product] growth during the last ten (2007 to 2017).”

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