The Global Positioning System: an Economic Powerhouse

RTI Innovation Advisors

The Global Positioning System, or GPS, started out as a product of the space race, the United States’ late-20 century effort to surpass Soviet achievements in space. Unleashed into the private sector just as multiple technological innovations were taking off, GPS grew into an economic powerhouse. Many industries leveraged GPS to grow more productive, while others were built around the technology.

Today, GPS steers drivers to their locations and ensures that packages reach their destinations. It helps farmers plan land use, alerts us when friends are nearby, and keeps power and communications networks in sync. In doing all this and more, GPS has driven $1.4 trillion in economic growth since 1983, according to our recently concluded report on the GPS for the National Institute of Standards and Technology.

The researchers investigated the potential effects of a major GPS outage due to space weather events or hostile actors. How would the various industries cope if they suddenly had to operate without GPS? What if the outage continued, perhaps for up to 30 days?

The effects of such a disaster would depend on whether other countries’ GPS-like systems were affected and how quickly various industries could revert to pre-GPS technology. Economically speaking, transportation and communications gridlock might pale in comparison to the harm done to agriculture. Estimates are that a complete GPS outage would cost the economy $1 billion per day, possibly more if the system failed during planting season when farmers use precision agriculture techniques to optimize crop yields. While such a prolonged outage may be unlikely, the $1 billion-per-day economic loss far outweighs the cost of building backup GPS systems.

The report showed that GPS is a prime example of how scientific investments from government pay off for society. The payoffs are often in amounts greater and ways more far-reaching than initially imagined. The report covered GPS applications in industries such as agriculture, electricity, location-based services, mining, maritime, oil and gas, surveying, telecommunications, and telematics. It also looked at the technical sensing requirements for each sector.

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