Weekend Reading: McKinsey Global Institute Research on the Economic Impact of the Internet

This week at the e-G8 Forum in Paris the McKinsey Global Institute unveiled a new research report that attempts to show “how the web in its entirety contributes to global growth, productivity, and employment.”

The McKinsey researchers looked at the Internet economies of the G-8 nations as well as Brazil, China, India, South Korea, and Sweden. Here are a few of the findings that we in Sydney thought were most interesting:

• “The Internet accounts for 21% of GDP growth in the last 5 years in mature countries”
• “Most of the economic value created by the Internet falls outside of the technology sector, with 75% of the benefits captured by companies in more traditional industries.”
• “Small and medium businesses heavily using web technologies grow and export 2x as much as others”
• “Infrastructure investment is essential” -- it’s an “irreplaceable prerequisite” for countries that want to maximize the economic benefits of the web

The report also mentioned some government funded programs around the world that were designed to encourage Internet usage among individuals and businesses. For example, the South Korean government launched the “Ten-Million-People Internet Education” program to reach demographic groups, like the elderly and farmers, who are not typically associated with Web activity.

This research provides some very relevant food for thought as we debate the future of the Digital Economy here in Australia.

Posted by Iarla Flynn, Head of Policy, Google Australia