How device hoarding by Americans is costing economy

If you’re keeping your aging printer or cracked smartphone for longer than planned, you’re not alone.

Heather Mitchell, 69, who is retired and lives in Tucson, Arizona, is happy with her phone, even though it’s old by smartphone standards.

“My Samsung Galaxy A71 is six years old. It’s held up surprisingly well for a junk. I’ve had and still have issues with it, but they’re minor,” Mitchell said. “I love Samsung phones, but I can’t afford a new one right now. A new phone would be a luxury.”

According to one study, the average American now keeps their smartphone for 29 months. Reviews.org’s latest surveyand this cycle continues. In 2016, the average was 22 months.

While shortening the life of your device as much as possible may save money in the short term, especially amid widespread fears about the strength of consumers and the job market, it can hurt the economy in the long run, especially where device hoarding occurs at the corporate level.

Research published by the Central Bank It was concluded last month that each year companies delay replacing equipment leads to a productivity decline of around one-third per cent, with investment patterns accounting for around 55% of productivity gaps between advanced economies. The good news: U.S. businesses are generally quicker to reinvest in replacing aging equipment. The Federal Reserve report shows that if Europe’s productivity matched US investment patterns from 2000, the productivity gap between the US and Europe’s heavyweights would shrink by 29 percent for Britain, 35 percent for France and 101 percent for Germany.

Experts agree that lost productivity and inefficiency are unintended consequences of people and businesses remaining reliant on aging technology.

“Think about how much internet speeds have changed in the last decade or more. In the 2010s, 100 MB speeds were considered high speed and very good. As little as 10 years later, we’re running at 1 GB speeds, which is roughly 10 times faster,” said Cassandra Cummings, CEO of Thomas Instrumentation, a New Jersey-based electronics design company. Operating at higher GB speeds requires different electronic hardware, and many older technologies cannot handle this.

“These devices were designed at a time when no one realized that such high speeds would become mainstream,” Cummings said.

This can also be a burden on nationwide networks.

“To support older, slower devices, both cellular and internet infrastructure must operate in a backwards-compatible manner. Networks often have to throttle their speeds to accommodate the slowest device,” Cummings said. “Often entire parts of networks or on-premises networks are running slower than they would be if all devices were compliant with newer standards,” he added.

Cummings doesn’t deny that staying up to date with new devices and hardware is expensive.

“Many companies, especially small businesses and individuals, cannot afford to constantly upgrade to the latest and greatest devices,” he said.

To ease the transition to new technologies, he says there should be repairable or modular designs rather than constant cleaning and replacement cycles. “Perhaps future devices could have a partial upgrade to ethernet communications, for example, rather than forcing someone to buy a completely new computer or device,” Cummings said. “I’m not a fan of the throwaway culture we have these days. It may help the economy spend more and force upgrades, but is it really helping people who are already struggling to pay bills?” he said.

In fact, entrepreneurs in the device resale market see longer-lasting technology as a success story that can be improved upon. Steven Athwal, CEO of the UK-based The Big Phone Store, which specializes in refurbished phones, says that the problem is not the longevity of the device. “The problem is latency. Businesses and individuals are trying to get modern workloads off legacy hardware, heavy processing, processing, rendering and management, creating a productivity drain. Things like slow processors, outdated software and degraded batteries in old technology waste energy and morale,” Athwal said.

He adds that once people have owned their phones or laptops for five or six years, the repair and replacement market becomes an active part of the economy. But right now, in both European, American and global markets, much of this is happening in the shadows.

“It is under-regulated, under-reported and under-used. If governments and big tech properly support refurbishment, aging devices can become part of a sustainable circular economy,” said Athwal, who is improving the secondhand cycle by expanding software support, improving access to parts and treating repair as infrastructure.

“This is how you disable constant switching. You don’t need to force constant upgrades, which puts a financial strain on businesses both small and large,” Athwal said.

Still, some device manufacturers have found ways to persuade consumers to replace their old phones with new ones. Apple, for example, had one of its most successful new launches with the iPhone 17, and artificial intelligence could be a game changer.

Najiba Benabess, dean of Neumann University’s School of Business, says rising prices and sustainability concerns are among the reasons for “America’s device obsolescence,” but the market should focus on slowing productivity, increasing repair and maintenance costs, and limited access to software updates and efficiency gains.

“Small businesses, in particular, are losing valuable hours every year due to lagging systems, creating what economists call a ‘productivity crunch,’” Benabess said. On a national scale, this means billions of dollars in lost production and diminished innovation. “While it may seem financially or environmentally responsible to keep devices longer, the hidden cost is a quieter erosion of economic dynamism and competitiveness,” he added.

Most people still want the latest and most up-to-date phones and tablets, but research shows a widening gap between businesses and individuals when it comes to aging devices, according to Jason Kornweiss, senior vice president of consulting services at global technology solutions provider Diversified.

“Companies with hundreds or thousands of employees do not invest at the same rate,” Kornweiss said, adding that technology is changing so quickly that IT departments cannot keep up with the pace and bloated companies must review the latest technology, which takes time, and by the time they do the review, something new is already coming. The result: businesses with increasingly useful technology.

Even if it’s a meaningful upgrade, “Businesses set a multi-year shelf life. Employees find it very tedious to replace devices within an organization, and people get embarrassed when the IT department comes up with a new device,” Kornweiss said.

The cost to the organization is through lack of productivity, inability to multitask and innovate, and unnecessary, extra hours of work. Workplace research conducted by Diversified last year found that 24% of employees reported working late or overtime due to outdated technology issues, while 88% of employees reported that inadequate workplace technology hindered innovation. Kornweiss says he doesn’t expect any improvement from last year’s numbers.

There is a disconnect between numbers and behavior. Many employees report that aging devices hinder productivity, but like a favorite pair of shoes or an old sweater, they don’t want to give them up to learn the ins and outs of a new device (they’ll learn it and then have to replace it with another). Familiarity can trump productivity for many employees. But the consequences of this IT commitment are felt in the bottom line.

“Productivity is hindered and these have a tangible impact on the economy,” Kornweiss said.

He says the greatest thing a worker has is time, and old devices gobble that up. Kornweiss said bring-your-own-device (BYOD) policies could be a savior for businesses that have been slow to upgrade, as individuals can easily integrate into most workplace systems these days using their own more functional devices. Another option for companies that don’t want to buy a bunch of devices that wear out quickly is to rent.

Kornweiss sees a future where technology continues to advance at warp speed and companies will struggle to keep up. People like Heather Mitchell will also remain glued to their devices.

“I tend to stick with my phone until I have no choice in the matter. This is only my fifth phone in 26 years,” Mitchell said.