Internet impact

John Quelch, in a report from “Working Knowledge,” a faculty research publication of the Harvard Business School, says the Internet employs more than 3 million Americans and accounts for about 2% of national GDP.

He also provides perspective on the early history of the Internet in which the original creators of the Internet wanted it to be commercial free.

“The fight was lost as consumers voted for free information supported by advertising over subscription services,” Quelch noted in this article. “Ironically, online advertising and the commercialization of the Web achieved important goals of the resisters: to preserve the Web as a medium for free publishing and communications.”

Continuing, Quelch says: “The advertising-supported Internet also helps the economy by fostering innovation, entrepreneurship, and productivity, particularly among small businesses that create most new jobs in the U.S.”

Citing various research, Quelch includes the following info in the article.
• The leading activities of Internet users: used a search engine to find information (81%); looked up the news (76%); used online banking (74%); looked up the weather (65%); researched a product or service before buying it (63%); visited a brand or product Website (61%); paid bills (56%); watched a video clip (51%); used a price comparison site (50%); listened to an audio clip (44%).

• The Internet employs 1.2 million people directly to conduct advertising and commerce, build and maintain the infrastructure, and facilitate its use. Each Internet job supports approximately 1.54 additional jobs elsewhere in the economy, for a total of 3.05 million, or roughly 2 percent, of employed Americans.

• The dollar value of the wages employed by those directly and indirectly as a result of the Internet is about $300 billion, or around 2 percent of U.S. GDP.

• The direct economic value the Internet provides to the rest of the U.S. economy is estimated at $175 billion. It comprises $20 billion of advertising services, $85 billion of retail transactions (net of cost of goods), and $70 billion of direct payments to Internet service providers.

• At work and at leisure, about 190 million people in the United States spend, on average, 68 hours a month on the Internet. A conservative valuation of this time is an estimated $680 billion.

Quelch concluded by noting: “When regulators start trying to constrain the Internet, let’s be aware of its enormous and ever-increasing economic and social impact. The Internet is an economic powerhouse that drives U.S. competitiveness and productivity.”