The Connected Continent: how big is the Internet in AUD?

The Internet’s always been easy to measure in terms of users, bandwidth or time. Working out how all those things add to the national bottom line is surprisingly hard. (Imagine trying to quantify the economic impact of the steam engine or electricity when those inventions were in their earliest days.) Given that the Internet is shifting every industry into a different gear, we decided to give it a shot. We asked Deloitte Access Economics to take an in-depth look at what the Internet is actually bringing to Australia in economic terms.



Deloitte’s report “The Connected Continent,” the first of its kind in Australia, finds that the Internet contributed 3.6% of Australia’s GDP in 2010. That’s the same as Australia’s iron-ore exports. The report digs into which businesses and industries use the Internet and tries to put a dollar figure on how much Australians get from the Internet. Here are some of the key findings:

• Australia’s Internet economy is likely to grow by $20 billion over the next five years, to roughly AUD$70 billion -- this is a 7% growth rate, which is twice as fast as the forecast for the rest of the economy.
• Productivity increases in businesses and government enabled by the Internet are estimated to boost GDP by around $27 billion in 2011.
• Households benefit from Internet use in the form of added convenience and a greater variety of goods and services; this is estimated to be worth an additional $53 billion, only some of which is reflected in GDP statistics.
• Every business in a small-business survey used the Internet to some extent, but only half had a website.

It’s clear from this research that Australia’s main industries are rewiring themselves around the Internet, and that a healthy digital economy is crucial to our future. But how did the Internet grow to be as large as our main commodity export? The answer is that the Internet boom is one that every business in Australia is contributing to. These days, every business in Australia is an Internet business. They might not realise it yet, but those that do are reporting huge benefits. Aussie Farmers Direct now generates over $100 million a year by selling fresh food online. Or take AuctionsPlus, which sold 2.2 million sheep via an online auction process to farmers at home and overseas last year.

The report is the latest in a series of reports sponsored by Google that try to measure the impact of the Internet. It also follows a research report from McKinsey that found that the Internet economies of the G-8 and Brazil, India, China, South Korea and Sweden accounted for 21% of GDP growth over the past 15 years.



The full report is available at www.connectedcontinent.com.au.



Posted by Nick Leeder, Managing Director, Google Australia & New Zealand