We need a new way to measure economic impact of the Internet

The Internet Association recently published a white paper called – Refreshing Our Understanding of the Internet Economy. It’s claims that we don’t have a good way of quantifying the impact of the Internet.

The research is funded by of companies made possible by the Internet (Amazon, Uber, Google…) and they make a good point.  Finding a better way to measure the impact would make it easier to create policies that encourage growth and minimize unintended consequences.

Here’s an interesting idea that helps illustrate the need…

Perhaps a more useful approach hinted at by du Rausas et al. (2011) is to consider the internet economy as a unique market (i.e. the same way we would a sovereign nation). They estimated that in 2009 the internet would have been one of the 10 largest national economies in the world, larger than Canada, Spain, and many other large developed economies, implying a global GDP contribution of over 2.1%. And while not entirely applicable, the approach does fit many of the economic activities in the internet. Recent years have seen the development and stabilization of new currencies (bitcoin and other cryptocurrencies), the development and sale of new territory (domains and sites), new production and distribution infrastructure systems (apps and network platforms), new communities and culture (social networks), and the collection and utilization of new forms of resources and commodities that can be mined and processed into economically useful items (data, APIs, and more).

This is not to suggest that the internet should be considered a country, but it does illustrate that the types of goods and services developed via and available through the internet should, at a minimum, be given more attention than they currently receive and, as the paper argues, considered a unique class with a more sophisticated approach of incorporation.

It’s a conundrum – but getting our arms around it will help us prepare. Even without the most accurate approach, the figure below (from the report) indicates that the Internet sector contributes 6 percent to the Gross Domestic Product.

This entry was posted in economic development, Research by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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