An enormous amount of money changes hands online every day… The Internet plays host to a huge variety of economic activity, from online purchases to electronic banking. Until recently, the economic impact and potential of the Internet had not been studied much. However, in 2011, a new report from the McKinsey Global Institute revealed just how big a role the Internet plays in economies around the world.
The McKinsey research looked at the impact of the Internet on the G-8 nations of Canada, France, Germany, Italy, Japan, Russia, and the UK and US plus some emerging nations, including Brazil, China, South Korea and India.
The findings of the report were surprising. Although it had been clear that online activities contribute economically to most countries’ GDP, the extent of the Internet’s economic value was revealed to be much greater than predicted. The average contribution made by the Internet to a country’s GDP was 3.4 percent. To put this result into perspective, online economic activity now makes up a larger portion of total GDP than the energy sector or agriculture.
Internet Creates Jobs
The other big finding from the McKinsey report is that the economic impact of the Internet is growing rapidly, creating jobs and allowing small businesses to grow and prosper. In a survey of nearly 5,000 small businesses, it found that the spread of these businesses onto the Internet created 2.6 jobs for every position eliminated due to technology.
As the entire human race comes to rely on the Internet more and more, the economic impact of the Web will continue to increase. Most importantly, the economic growth will not be confined to the technology sector… already 75 percent of the Web’s economic value is benefitting companies in non-technological sectors.
Internet use is increasing rapidly in Asia, opening up new markets for products and services that can be bought and sold online. As well as the traditional model of online retail, in which the purchase takes place online but delivery uses traditional channels, new technologies such as 3D printing could one day allow products to be delivered through an Internet connection.
One of the most important and rapidly growing areas of online economic activity is the collection and analysis of large amounts of data. The Internet allows a huge amount of data to be collected about the location and behavior of users, and this information can be used to create better targeted marketing campaigns and deliver more accurately tailored services.
There is a huge demand for people who can make sense of this data and use it to fuel further online economic growth. The people who work with data in this way are known as data scientists, which is a role that is likely to become a much more popular career choice in the near future.
Data scientists have the daunting job of answering the questions of “what is big data?” and “how should big data be managed?” It is not enough to merely have the technical skills needed to manipulate large datasets; the legal and ethical implications of storing large quantities of data about Internet users must also be considered.
The rapidly changing world of the Internet will bring challenges to business owners, as they scramble to take advantage of emerging markets and embrace technological developments. The growth of the online economy also presents big opportunities for those with the data analysis skills needed to get ahead.
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About the Author:
Darryl Adkins loves to stay on the pulse of all things technological. An avid blogger, you can read his writings on various Internet Tech blogs.
Image courtesy of Stuart Miles / FreeDigitalPhotos.net
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