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Friday, August 01, 2014
Trinidad & Tobago Guardian Online
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Growing the domestic economy
The impact of the Internet on modern society is profound. The global network now facilitates interconnectivity between individuals, communities and economies. The global Internet economy has already surpassed traditional powerhouse global industry sectors such as agriculture and energy. Yet for developing countries, the tangible benefits of the Internet on the local economy are not always obvious or the can be outright elusive.
Catalyst for the global economy
The Internet itself is a complex cauldron of economic interests, spanning millions of daily online transactions, and a host of downstream “off-line” activity including production, sales, distribution and consumption.
A study by the McKinsey Global Institute—Internet matters: The Net’s sweeping impact on growth, jobs, and prosperity— found that the Internet accounts for 3.4 per cent of overall gross domestic production in the 13 nations studied.
More than half of that impact arises from private consumption, primarily online purchases and advertising. An additional 29 per cent flows from investments by private-sector companies in servers, software, and communications equipment. The same study also found that Internet is a critical element of economic progress, pushing a significant portion of economic growth.
Based on the report’s findings, most of the economic value the Internet creates falls outside of the technology sector: companies in more traditional industries capture 75 per cent of the benefits.
The Internet is also a catalyst for generating jobs. Among 4,800 small and mid-size enterprises surveyed, it created 2.6 jobs for each one lost to technology-related efficiencies.