Reigniting the global economy... online

Last week in Davos, Switzerland, leaders were discussing ways to restart the sputtering global economy. Two new studies released at the World Economic Forum offer the same answer as last year’s “Connected Continent” report: go digital.

The Boston Consulting Group’s “Digital Manifesto” predicts that the value of the Internet economy in the world's top 20 economies (including Australia) will boom to US$4.2 trillion in 2016—nearly double 2010’s number. One of the biggest drivers will be the huge increase in the number of people accessing the web. In four years, the report predicts three billion people will be using the internet, or over 40% of the world's population.

The Internet does not just benefit the developed world, either. It contributes an average of 1.9 percent of GDP across 30 countries in the developing world and generated 1.9 million jobs alone in six countries: Hungary, Malaysia, Mexico, Taiwan, Turkey, and Vietnam, according to a new McKinsey & Co. report, also released in Davos last week.

Both the McKinsey and BCG reports are the latest chapter in more than a year of work by the two consultancies and others on the Internet’s growing economic impact. For example, the “Connected Continent” report released by Deloitte Access Economics in August 2011 found (amongst other things) that the Internet already contributes AU$50 billion, or 3.6% of GDP, to the Australian economy and forecasted that the amount will rise to AU$70 billion by 2015. Full disclosure: Google funded this joint research effort, though the reports were conducted independently. You can see the full range of all these country reports on a new website called Value of the Web.

Taken together, these reports represent a growing body of evidence about the huge economic opportunities that the digital economy provides for individuals and businesses, large and small, in Australia and the world.

Posted by Iarla Flynn, Head of Public Policy, Google Australia