It Keeps Growing…and Growing…

The internet already accounts for a significant slice of the world’s economic output. Here’s how its share is expected to grow in the G-20 countries over the next few years.

During the past two decades the internet has transformed industries and become a powerful driver of economic growth. In some countries, according to an analysis by the Boston Consulting Group, it contributes as much as 7% or 8% of GDP—and in every country its size and impact on the economy will only increase. Measured as a separate industry, the internet economy—which encompasses consumer consumption (both online purchases and internet access), private and public investment, and net exports—is already outpacing some formidable sectors: In the United States it accounts for a larger slice of GDP than the federal government. In China it’s among the top six industry sectors, and in South Korea it’s among the top five.

By 2016, the researchers say, 3 billion people—half the world’s population—will be online. The majority of them will be using mobile devices to access the web, which means they’ll be able to make purchases anywhere, anytime, by touching a screen. BCG’s analysts predict that in the UK, for instance, 23% of retail activity will be conducted via the internet. The growth of the internet sector will also affect labor markets: According to the analysts, small and midsize enterprises that utilize the web aggressively tend to generate more jobs.

Understanding the scope of this growth—and how it varies between countries—will be essential as managers make decisions about investments and strategy.