Previous post:

Next post:

Massive Growth of the Internet Economy

November 7, 2011

Those of us who spend a sizeable proportion, or even all, of our business lives online do so because we are convinced that this is where the action is. What’s more, we want a part of it.

But how big is it really? Is it still possible to suggest that online business, especially retail, is a passing fad? Will we look back in thirty years time, if we’re still here, engaging in nostalgia for the fascinating and often frustrating techno-economic experiment in which we played bit-parts? Well the signs are pretty clear now.

Questions like that were maybe still valid even five years ago, but things have moved on. This is for real, and a new report from McKinsey consultants shows something of the distance. The report’s authors tell us that, “The Internet accounted for 21 percent of the GDP growth in mature economies over the past 5 years.” Derek Thompson, commenting on it in The Atlantic magazine yesterday said:

As an industry, the Internet contributes more to the typical developed economy than mining, utilities, agriculture, or education. In Sweden, fully one-third of economic growth in the five years leading up to the recession came from Internet activities. For the entire G-8, the average was 21 percent. …… The United States is the world leader in the online industry, grabbing 30 percent of global Internet revenues. But the UK is the world leader in online retail. The British spent $2,535 on e-stuff in 2009, more than twice the average of the world’s largest countries and still 1.4 times the amount of the typical U.S. shopper. Sweden leads the world in Internet’s contribution to GDP.

Yes, it varies from country to country, but there’s no question that business online is here in a big way worldwide, and is here to stay. As small business people we need to learn how best to relate to our markets, and how to expand those markets. What’s more, we need to learn quickly. Things are moving fast.

The full report is available from the web site of MGI, the McKinsey Global Institute: The Great Transformer: The Impact of the Internet on Economic Growth and Prosperity.

Be Sociable, Share!

Comments on this entry are closed.