Holding onto that aging printer or cracked smartphone longer than initially planned? You’re not alone. Consumers and corporations alike are squeezing more life out of their tech, but this could be a double-edged sword for the economy.
“My Samsung Galaxy A71 is six years old. It’s hanging in there surprisingly well,” says Heather Mitchell, 69, a retiree in Tucson, Arizona, who admits a new phone would be a luxury.
According to recent data, the average American now holds onto a smartphone for 29 months, a significant increase from around 22 months in 2016. While this might seem like a savvy way to save money amid economic uncertainty, especially concerning consumer spending and the job market, experts warn that widespread device hoarding could have long-term consequences.
A Federal Reserve study last month revealed a concerning trend: each year a company delays upgrading its equipment, productivity declines by roughly one-third of a percent. Investment patterns, the study notes, account for approximately 55% of productivity gaps between advanced economies. Notably, U.S. businesses are generally faster at reinvesting in and replacing aging equipment. The report suggests that had European productivity mirrored U.S. investment patterns since 2000, the productivity gap would have been significantly reduced – by 29% for the U.K., 35% for France, and a striking 101% for Germany.
The consensus among experts is that this reluctance to upgrade leads to lost productivity and overall inefficiency.
“Think about how much internet speeds have changed,” says Cassandra Cummings, CEO of Thomas Instrumentation, an electronics design company. “In the 2010s, 100MB speeds were considered high speed. Now, we’re operating at 1GB speeds, roughly 10 times faster.” This leap in speed demands updated hardware that older technology simply can’t handle.
According to Cummings, older devices can also strain nationwide networks as cellular and internet infrastructure are forced to remain backwards compatible. “Networks often have to throttle back their speeds to accommodate the slowest device,” she explains. “Often, entire sections of networks, or company internal networks, are running slower than they would if all devices were up to the newer standards.”
Acknowledging the cost of staying current, Cummings suggests a shift towards more repairable and modular designs. “Future devices could have partial upgrades, say, in ethernet communications, rather than forcing someone to purchase an entirely new computer or device,” she says, advocating against a “throw-away culture.”
Steven Athwal, CEO of The Big Phone Store, a UK-based refurbished phone specialist, believes device longevity isn’t the core issue. “The issue is the lag. Individuals and businesses are trying to squeeze modern workloads out of old hardware. Slow processors, outdated software, and degraded batteries on older tech waste energy and morale,” he says, pointing to the productivity drag created by outdated technology.
Athwal argues that embracing repair and refurbishment is key to a sustainable circular economy, but the second-hand market remains largely unregulated and underutilized. By extending software support, improving access to parts, and recognizing repair as infrastructure, manufacturers and governments can reduce the pressure for constant upgrades.
Of course, some manufacturers are still finding ways to entice consumers. Artificial intelligence capabilities, for example, are proving to be a significant driver of new device demand, even with rising prices and sustainability concerns, pushing consumers to upgrade to the latest models.
Najiba Benabess, dean of the business school at Neumann University, emphasizes the hidden costs of aging technology. “Small businesses, in particular, lose valuable hours each year due to lagging systems, creating what economists call a ‘productivity drag.'” On a national level, she says, this translates to billions of dollars in lost output and reduced innovation. Benabess concludes, “While keeping devices longer may seem financially or environmentally responsible, the hidden cost is a quieter erosion of economic dynamism and competitiveness.”
Jason Kornweiss, Senior Vice President at Diversified, a global technology solutions provider, notes a growing divide between businesses and individuals in their approach to technology upgrades. Corporations, he says, are often slower to invest in new technology. The complexities of vetting and implementing new systems, combined with employee resistance to change, delays upgrades, resulting in businesses operating with increasingly outdated technology.
Diversified’s research indicates that 24% of employees work late or overtime due to outdated tech, and 88% believe inadequate workplace technology stifles innovation. This IT “clinginess” directly impacts the bottom line.
“Productivity is hampered, and it all has a tangible impact on the economics,” Kornweiss says.
Kornweiss sees Bring-Your-Own-Device (BYOD) policies and leasing programs as potential solutions for businesses struggling to keep pace. With workplace integration becoming easier, employees’ personal devices can bridge the technology gap, while leasing models offer a less capital-intensive way to stay current.
Looking ahead, Kornweiss foresees technology continuing to advance rapidly, creating ongoing challenges for companies to keep pace. Meanwhile, individuals like Heather Mitchell will likely continue to prioritize practicality and affordability.
“I tend to hang onto my phone until I have no choice in the matter. In 26 years, this is only my fifth phone,” Mitchell concludes.
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