IDA Study on GPS Modernization Benefits

In the fall of 1998, on behalf of the Department of Commerce, the Institute for Defense Analyses (IDA) conducted a quick assessment of the economic benefits of GPS modernization and accelerated implementation of one of the new civilian signals. IDA collected written and verbal inputs from U.S. companies spanning a wide range of GPS applications, including automotive, railroad, maritime, aviation, agriculture, mining, construction, manufacturing, cargo, telecommunications, and space. These inputs formed the basis of a roundtable discussion in December 1998 between Deputy Secretary of Commerce Robert Mallett and a number of representatives from these companies.

The participants were unanimous in stating that they would benefit from accelerated GPS modernization, but when it came to quantifying economic impacts, they were largely unable or unwilling to assign dollar values to something that far in the future. The clear message was, "If you build it, they will come -- and the sooner, the better."

A handful of respondents did offer some quantitative estimate of the economic benefits they would enjoy from a new signal in space by 2005. These are summarized below.

Respondent Benefits Cited
American Association of Railroads
  • Positive Train Control rail capacity could be increased by 20-25% on heavily traveled routes
  • Accident avoidance capabilities could lead to initial $33 M in savings
Boise Cascade
  • $4-8 M in increased field productivity and increased number of projects/applications
Motorola
  • Savings in hardware not needed in space or on the ground could exceed $40 M
  • New hardware designs and individual satellite applications could exceed $10 M
Atlantic Container Line
  • Cargo throughput could increase 10-15% at certain shipping ports
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