Statistically speaking, Internet is more valuable than agriculture to the global economy. If you count it as a separate sector of economy with its own investment, expenditure and consumption activities, Internet overshadows the contribution of agriculture to the world’s gross domestic product (GDP).
Management firm Mckinsey analysed data from 13 countries, including India, which cosntitute 70 per cent of the global economy. Across these economies 3.4 per cent of GDP came from internet-driven activities. The contribution of agriculture was 2.2 per cent, real estate, the most valuable sector, held a 11 per cent share.
Internet has transformed from an obscure network, which connected geeks, to a worldwide economic viagra in just two decades. It connects two billion people now and supports e-commerce transactions worth 8 trillion dollars annually. Its slice of global GDP is bigger than the GDP of Spain and is growing faster than the Brazil’s economy.
Internet economy is not limited to dot coms. Seventy five per cent of its economic impact has been felt by companies in traditional sectors, which do not describe themselves as Internet players. Riding on a digital network they have learnt better ways to make and sell their products and become more efficient. The most dramatic impact of Internet has been on small companies, which now have access to supply chains and distribution channels running across geographies.
As Internet continues to disrupt traditional industries, it is is creating, not just destroying, jobs across industries. Internet has deleted 500,000 jobs in France over the last 15 years, but has also created 1.2 million new ones, a net addition of 2.4 for every job destroyed. Internet is a good indicator of the standard of living; deeper its penetration, higher the standard of living.
We really don’t have to go far to feel the magical prowess of Internet. It drove Bangalore from a sleepy, obscure town to a global brand famous for outsourcing and urban chaos.