McKinsey Global Institute: Internet Boosting Global Economies
With more than two billion people using the Internet, even the most casual observer can see that it plays an advantageous role in commerce and, from that, job creation. As members of the industry, we may recognize the positive influence that the Internet has worldwide, but it’s challenging to specifically quantify the economic impact. With that question in mind, a May 2011 McKinsey Global Institute study has provided an evaluation to more precisely show how the Internet contributes to national economies. While the study was published last year, its findings present an interesting snapshot of the Internet’s growing influence over time.
McKinsey researched the effect that the Internet has had on GDP and boosting the economy in 13 countries, which included the G8 (Canada, France, Germany, Italy, Japan, Russia, United Kingdom, United States of America) as well as Brazil, China, India, South Korea, and Sweden. While there were fluctuations depending on the country, one thing is universal: the Internet is a critical vehicle to help grow the economies. According to the study, the Internet accounted for 3.4 percent of the GDP on average of the 13 countries examined, which included 6 percent in countries with larger economies and the majority of even smaller economies being under 4 percent.
The research also showed that the Internet has accounted for 21 percent growth of GDP in the past five years from 2011 in larger economies and 11 percent growth over the past five years for all countries included in the study. These numbers are constantly increasing and if continued to be harnessed, the Internet has almost unlimited potential for even the world’s smallest economies.
In addition to underscoring the benefit that the Internet has on GDP, the study also showed that the Internet is an important factor in job creation. According to McKinsey, 2.6 jobs were created for every job lost in the industry. Similarly, the research also highlighted a rise in living standards over the past 15 years, with an average of $500 increase in GDP per capita.
While the beneficial impact of the Internet continues to be realized internationally with an estimated $8 trillion in annual e-commerce, we in the Internet Infrastructure Industry continue to focus on ways to spur innovation and growth for such an important sector in our global economy.