Innovation Drives Growth

Apple’s iPhone 5 has become available to the public for presale. This may seem like a non-event to some, but it’s important to note what Apple, with the introduction of the iPod and iPhone, created and have nurtured. The iPhone is a technological marvel—really, the first of its kind smartphone that has spawned an entire industry. The environment in which the Apple i-Product sphere was created could be taken as a lesson for policymakers and regulators who oversee industry in America.

According to one analyst, a conservative estimate of 4th quarter sales of the iPhone 5 could be 10-12 million units. Their smartphone business is now so valuable that if it were spun off into its own company, it would still be more than Microsoft. But their own growth isn’t the only thing that Apple is driving with its innovative products.  The wireless companies that carry the iPhone have seen large growth, with AT&T and Verizon seeing their shares up 24% and 10%, respectively. It’s been a boon for the carriers, as customers clamor for wireless Internet access. Apple has also created an entire ecosystem of appmakers who build onto the iPhone. It’s spawned hundreds of businesses and created thousands of jobs, with one studying reporting the app industry could account for 500,000 jobs created. Another study says that the app industry will top $17.5 billion this year alone. Apple has undoubtedly also had a hand in creating completely new business lines for competitors—from Amazon to Microsoft to Google to Samsung—the smartphone and tablet industry is flourishing, and its up for debate whether this industry would exist without the innovative thinking behind the products.

To see how much entrepreneurial thinking and unfettered capitalism can effect our economy so greatly, one only has to look at the astounding proclamation made by J.P. Morgan’s chief economist—that sales of the iPhone 5 alone could account for a 0.5% growth in GDP. This growth shows how unleashing business, without the intrusion of government regulations, can drive economic growth and create good outcomes for consumers. Apple has thrived by encouraging innovation in its products and services. It didn’t become successful, create hundreds of thousands of jobs and drive others to innovate through government subsidies and cheerleading. They did it by serving consumers with products that would improve their lives.

Over-regulation and over-taxation can impede innovative products from coming to market, stopping huge growth that could lead to more jobs and better, cheaper services and products for consumers. This should be a lesson from government—when companies are allowed to thrive, good things happen for the economy. Imagine if the barriers that are currently up were lowered even more—there’s no telling what hardworking entrepreneurs and companies can accomplish.

Zack Christenson is a digital tech writer for the American Consumer Institute

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