Smartphones should have a positive externality on work and production. Now that people have the Internet with them at all times they are able to check e-mail and do other work related activities that they were not able to do unless they were in an office with a computer and Internet. Unfortunately this is not the case. Even though people can take the Internet with them everywhere now, this is actually a negative externality. One would think that these devices would improve productivity when in reality it is just one more thing to distract the worker from what needs to get done. Yes, they do check their e-mail often for work but now it is even easier to get sidetracked with other apps on their phone. The long-term average increase in productivity per year is 2.25% however, since the era of smartphones began, production has only been increasing 1.5% a year. It is harder for people to close out of Flappy Bird and seriously consider their work. However, this stops no one from continuing to play on their phones instead of working, the companies are the people who are seriously suffering from this negative externality because it’s their production that is going down. A lot of companies are even funding this negative externality because they need all of their workers to have smartphones.
http://online.wsj.com/news/articles/SB10001424127887323982704578455163211575512
http://www.huffingtonpost.com/2014/01/24/smartphone-night-worklace_n_4653223.html
I have always been a firm believer that smartphones make dumb people (though I own one as well…). I think it’s an interesting point that many firms require smartphones and by doing so may actually be lowering worker productivity. It would be interesting to see statistics on productivity since the internet became an office place standard as well. I think that is a service that exhibits positive and negative externalities in regards to productivity. I think these externalities are also very user dependent.