This past week, Google unveiled two reports they commissioned that take a close look at both the domestic (U.S.) and global market for Geo services. The reports were prepared for Google by The Boston Consulting Group (BCG) for the domestic portion, and Oxera for the global take. Both studies are keyed toward three outcomes: the assessment of the size of the industry; its economic impact; and the drivers for broader global expansion, including discussion of public and private investments.
The two-pronged assessment of the industry provides some very interesting metrics, and perhaps sparked some criticisms from those that can point to gaps of sectors that aren’t included. It has become increasingly hard to assess the Geo “industry,” with few attempts recently other than of specific sectors. These reports do a good job of compiling a broad view, while also providing encouragement for vendors and practitioners, pointing to double-digit annual growth rates and a world of opportunities.
The domestic report by BCG puts the whole sector at $73B in revenue with 500,000 jobs, and an economic impact 15 to 20x that amount -- driving $1.6T in revenue and $1.4T in cost savings for enterprise users, and with $37B of value direct from consumers that are willing to pay for the convenience these services afford. The U.S. market is said to be in a high-growth phase according to the report, with signs of broad integration into core business processes that will mark its maturity.
The Oxera report uses a slightly different methodology, with a focus on transactions that put the global revenue at $150 to $270 Billion. A good portion ($90 billion) of that is paid in wages to workers. Overall, the sector makes up roughly 0.2% of global gross domestic product (GDP), making it comparable to the global security services industry. While much of the western world is marching toward maturity, the great majority of the world is still in a nascent Geo services adoption phase.
The broadened use of Geo services are largely thanks to Google’s efforts to popularize Web and mobile map applications. The impacts of their geo products are quantified in general in these studies, with figures on adoption. In the BCG report, 51% of the 1,000 business leaders surveyed indicate that they use web-based mapping services in their business, and 36% said they use geo-enabled devices. In Europe, according to the Oxera report, 50% of Internet users access maps online and 35% access them via smartphones.
The use of the tools in routing and logistics alone is worth $22 Billion in fuel costs and time saved according to Oxera. In the BCG report, they put the number of people in the U.S. that rely on geospatial services to conduct their jobs at 5.3 million. The educational benefit of Geo services is said to promote a “higher-order thinking” in the Oxera report, and is estimated at $12 billion per year. While 40% of those polled in the U.S. say that Geo services provide an important competitive advantage for Americans, and a full 19% feel that government investment is driving efficiency in American business. Practitioners should feel encouraged by the high demand for skills, with Oxera pegging higher than average job growth of 22% for cartographers, 16% for survey/mapping technicians, and 35% for geographers between 2010 and 2020.
In both reports, government investments in data collection, open data policies, and the need for greater education are assessed as the major drivers for continued growth. While there is mention of private innovation and investment, there are also cautions that data gaps are starting to take place with aging public satellite-based platforms. GPS is singled out as a vulnerability as much of the Geo services value is placed upon a platform that no industry owns or controls.
Google has recently shared their strategy that personalized geo services will be their next wave of development. As geo services increasingly go mobile, there are uses and practices that could draw greater regulatory scrutiny. With Apple failing to deliver a compelling map service of their own this year, Google stands well out front and is perhaps feeling somewhat vulnerable. Together these reports sum up an industry that is on a global growth track that is counter to the economic downturn. The quantification of the value to society is of help to shore up public support, and to reinforce the multiplier effects of continued government investment. The alternative without this support would lead to a loss of market advantage, and a global return to inefficient practices.
See the full reports for much more detail into the findings and methodology.