Economic Impact of Geospatial Industry surges to US$ 2210.7 Billion

Economic Impact of Geospatial Industry surges to US$ 2210.7 Billion

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Geospatial information and technology are becoming pervasive in our day to day lives as the ‘location’ component becomes an integral component for decision making in all key economic segments ranging such as Defence and Internal Security, Transportation, Construction, Mining, Agriculture, Utilities, etc. However, even while the industry is growing at an accelerating rate, and almost all key economic segments are leveraging on spatial information for improving efficiency and productivity, the true economic value and impact of this technology is hidden and more often than not, underappreciated. Even though geospatial data lies at the core of decision-making and continues to create its impact in creating significant benefits for social, economic and environmental benefits (SDGs!); it has become necessary to understand the economic impact of geospatial industry for the society at large.

The GeoBuiz-18 report, by Geospatial Media and Communications, highlights how geospatial solutions fuel economic growth. As the use of geospatial information and technology gets embedded in key business processes such as Business Information Management, C4ISR, Enterprise Resource Planning (ERP), Supply Chain Management Network, Environment Impact Assessment, among many others, its overall value creation for the economy also continues to expand. There are a plethora of applications, sectors, and segments where geospatial solutions are applied, thus enhancing the economic return from these applications.

Economic Impact of Geospatial Industry: Facts and Figures

The GeoBuiz-18 report assesses the economic impact of geospatial industry by conducting a thorough economic impact assessment of several reports put together. The study finds that while the geospatial industry grew at a CAGR of 11.5% from 2013 to 2017, from US$ 202.8 Billion to US$ 292.2 Billion, the economic impact created was several times higher. The economic impact of geospatial industry, over the period 2013-2017, was nearly double the industry’s revenue growth, growing at a stupendous CAGR of 20.9%! Due to wider integration and adoption of geospatial information and technology, the economic impact of geospatial industry is estimated to have grown from US$ 1,118.7 Billion in 2013 to US$ 2,210.7 Billion in 2017!  This shows the positive spillover effects of the geospatial industry on the society and economies of the world.

Economic Impact of Geospatial Industry
Source: GeoBuiz-18

Concurrently, a report by AlphaBeta, on ‘Global Economic Impact of Geospatial Services’, released in October 2017, illustrated that while geospatial services generate US$400 billion in year-the cumulative benefits for the consumers, societies and businesses are tremendous. The study highlights that consumer benefits created by geospatial services are worth over US$550 Billion; geospatial services create 4 million direct jobs and potentially 8 million direct ones; help people save time worth US$ 264 Billion and US$ 20 Billion in fuel; and reduce the emergency response time by approximately 20% in some countries. This, by and large, signifies the role geospatial information and technology play as a key economic enabler.

Geospatial Technologies: Towards Creating a High-Value Impact

Facilitated by new and enabling technologies (Cloud, Big Data, AI and Internet of Things) of the digital ecosystem, geospatial technologies are expanding their application bandwidth continuously. Geospatial technologies such as GNSS and Positioning, GIS and Spatial Analytics, Earth Observation and 3D Scanning are getting embedded in business processes to positively impact key economic segments like Transportation, Utilities, Construction, Mining, Agriculture, BFSI, Government Services, Manufacturing, Forestry, and Fisheries. While Defence and Internal Security continue to be the fastest and strategic user segment of geospatial information and technology, the other key sectors generate substantial economic impact.

A case in point is that of the Copernicus Program, Europe’s leading Earth Observation program formed in collaboration with the European Union, the European Space Agency, and the European Organization for the exploitation of Meteorological Satellites (EUMETSAT). As ‘Europe’s eye on Earth’, the exploitation of Copernicus-enabled products is bringing multiple socio-economic benefits in various economic sectors. These include urban development, agriculture, urban monitoring, insurance, ocean monitoring, oil and gas, renewable energies, forestry and fisheries, and tourism, among many others Contributing to the excellence of the ‘European Space Industry’, the potential economic impact of the Copernicus program on the European economy is estimated to be worth EUR 30 billion in addition to the 50,000 additional jobs that it shall create. It is also seen that of every EUR 1 spent from the public funds in the Copernicus activities, the value-addition to the whole economy is EUR 1.4 — a decent investment to benefit streak.

Economic Impact of Geospatial Industry
Source: GeoBuiz-18

Reinforcing the Copernicus example is the analysis of GeoBuiz-18 report which highlights the economic impact of geospatial industry on key priority economic sectors. Leading these sectors are Transportation and Utilities – generating a massive value impact worth US$ 623.2 Billion and US$603.9 Billion respectively. For instance, efficient transportation due to GPS navigation enables consumers to save on fuel and time while potentially reducing global CO2 emissions by 5% per year (AlphaBeta). For utilities, GNSS technology is used for asset mapping –, so as to locate and manage large networks of infrastructure assets and improve asset maintenance. A case in point is illustrated in the Allen report which estimates that the impact of using geospatial technology for the utility sector in Australia could generate a potential productivity impact of 1.25% by 2030. Additionally, the economic impact of geospatial industry/technology in traditional end-use sectors like Construction, Mining and Agriculture sectors is accelerating. With a value impact worth US$244.9 Billion, US$222.7 Billion and US$111.7 Billion respectively, these sectors are driving the overall economic value created in the developing countries.

Furthermore, Retail and Logistics, Forestry, Banking, Finance and Insurance (BFSI) are sectors largely driven by criticalities of location. GIS, GNSS and Location Analytics is used across a wide spectrum of all these sectors bringing strategic shifts to these businesses. While these sectors are new, and the adoption of geospatial technology is at a nascent stage – these sectors have the potential to generate high-value impact (tangible and intangible) for the society.

What next?

The economic impact of geospatial industry is incredible and the multifarious opportunities available have not yet been tapped in its entirety. At the centricity of economics lies the potential of employing geospatial information and technology at the grassroots level to maximize the impact created. While the economic impact of the geospatial industry remains hidden, the impact of it can be felt in day-to-day lives by each and every citizen all over the world. The industry is spearheading towards a growth trajectory at an accelerated rate of 13.6% to reach US$ 439.2 Billion in 2020; it is but expected that the economic impact is going to be augmented by manifolds. While developed countries are driving the global economic impact of the geospatial industry presently; the demand for geospatial solutions in the developing economies are going to drive the expansion of the geospatial user base and its adoption, thus driving the economic impact by significant margins.

To further understand the regional and global growth of geospatial industry and the economic value impact it generates, download GeoBuiz-2018.

What constitutes the geospatial technology ecosystem?