At scale, however, the decision to squeeze extra years out of hardware carries an economic cost. Research released last month by the Federal Reserve found that every additional year companies postpone equipment upgrades reduces labor productivity by about one-third of a percentage point. The study concluded that investment patterns explain roughly 55 percent of the productivity gap observed among advanced economies.
The impact is particularly visible in Europe. The Fed’s analysis estimated that, had investment levels in the United Kingdom mirrored those of the United States starting in 2000, the current productivity gap between the two countries would be nearly 29 percent smaller. The shortfall would be 35 percent lower for France and entirely erased for Germany.
Cassandra Cummings, chief executive of New Jersey-based electronics design firm Thomas Instrumentation, said hardware built for an earlier era struggles with today’s network speeds. Internet service that delivered 100 megabits per second a decade ago has given way to gigabit-level connections. “Older devices were never engineered to move data that quickly,” she explained. To accommodate them, cellular and broadband providers must maintain backward-compatible settings, effectively throttling large portions of their networks.
Cost remains the main obstacle to faster turnover. “Many small businesses and private users cannot afford to upgrade constantly,” Cummings added. She advocates modular, repairable designs that allow components such as network cards to be swapped without discarding an entire system.
The secondary market is poised to benefit as devices last longer, said Steven Athwal, chief executive of U.K. refurbisher The Big Phone Store. He sees demand for repair services rising when people keep phones or laptops for five or six years. Yet he argues that much of the refurbishing sector is “unregulated, underreported and underutilized.” With broader support from manufacturers and governments—through longer software support windows and easier parts access—aging electronics could feed a more robust circular economy, he said.
Device makers still find ways to entice buyers. Apple’s recent release of the iPhone 17 generated brisk initial sales, and analysts expect upcoming artificial-intelligence features to accelerate the next upgrade cycle. Najiba Benabess, dean of the business school at Neumann University, cautions that rising prices and environmental concerns may keep many consumers on the sidelines. “While keeping devices longer may seem financially or environmentally responsible, the hidden cost is a quieter erosion of economic dynamism,” she said.
Imagem: Internet
Small firms feel the strain most acutely. Lagging systems translate into more frequent repairs, higher maintenance outlays and limited access to security patches. Benabess estimates that lost hours across the nation amount to billions of dollars in forgone output each year.
Workplace data underscore the problem. Research conducted in 2023 by technology solutions provider Diversified found that 24 percent of employees routinely work late to compensate for slow or unreliable hardware, and 88 percent believe inadequate technology stifles innovation. Jason Kornweiss, a senior vice president at Diversified, said corporations typically assign a multi-year shelf life to devices, while consumer technology now advances in 12- to 18-month intervals. “By the time an IT department finishes vetting a new laptop, a more powerful model is already on the market,” he noted.
Kornweiss pointed to bring-your-own-device policies and equipment leasing as potential stopgaps for companies reluctant to purchase hardware outright. Even so, he said, time lost to sluggish machines eats directly into profitability. “A worker’s most valuable commodity is time, and older devices consume that commodity quickly.”
Mitchell’s experience suggests many users will continue to resist frequent replacement. With no urgent reason to change phones, she intends to hold on to her current handset as long as it functions. That attitude, echoed in households and offices nationwide, may keep productivity growth under pressure until the benefits of new technology outweigh the comfort of the familiar.
Further details on productivity and investment trends can be found in the Federal Reserve’s research publications.
Crédito da imagem: Getty Images
