Source: UNDP (1999), Human Development Report 1999, p. 30.
Transport and Communications Costs Indexes, 1920-2000
Transport and communications costs have considerably declined during
the 20th century, notably with technological improvements and through
the application of economies of scale. By 1960, maritime transport costs
were a third of their 1920 level. Air transportation costs have followed
a similar trend, but over a much shorter time frame. Air transportation
boomed after the WWII with the application of significant technological
improvements (such as the jet engine) and the design a better aircrafts.
Telecommunications are however the sector where costs have decreased
the most. In 2000, an international phone call was about 1% of its 1940
cost. For instance, while a three minutes phone call between New York
and London was $293 in 1931 (1993 dollars), the same call was $1 in
2001 and about 25 cents in 2005. With fiber optic cables and decreased
costs for satellite use, telecommunications are accessible throughout
the world, particularly through the Internet. The current mass diffusion
of cell phones has decreased costs further. Another significant wave
of innovation involves information technologies, as indicated by the
excessively rapid decrease of computer costs since their initial introduction
(mainframes) in the 1960s. Each new generation of computers is faster
and cheaper than the previous.