The postal service may be in a financial vise right now, but 50 years ago it created an economic legacy, one now reportedly worth billions of dollars a year: On July 1, 1963, it introduced the five-digit ZIP Code.
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According to a new report out this month from the U.S. Postal Service Office of Inspector General, the ZIP Code is worth about $9.5 billion a year. The USPSOIG teamed up with IBM to do the analysis and found that four groups benefit, roughly equally, from the existence of the ZIP Code: the postal service itself to the tune of $2.2 billion; firms that use it for mail-related products get about $2.1 billion from the ZIP Code; firms that use it for non-mail products get a value of $2.4 billion; and consumer, governments and non-profits benefit to the tune of $2.9 billion.
Estimating the economic impact of something as intangible as the ZIP Code is difficult, of course: some uses could not be calculated; assumptions had to be made; and some of the data were dated. But there's no denying that the ZIP Code is an innovation whose benefits have far exceeded its original intent. Here's how the report puts it:
"The code was originally intended to allow mail sorting methods to be automated but ended up creating unimagined socio-economic benefits as an organizing and enabling device. The ZIP Code became a social tool for organizing and displaying demographic information, a support structure for entire industries such as insurance and real estate, and even a representation of social identities as observed in the television series Beverly Hills, 90210. Today, the ZIP Code is much more than a tool for moving mail efficiently, and its positive spillover effects are enormously beneficial to society."
ZIP Code-style codes have even found a home in the slums of India, where at least one nonprofit is using themto "address the unaddressed."