Policy by the Numbers: Figuring out how much the Web is worth

Figuring out how much the Web is worth

Friday, January 20, 2012

Today we’re launching a website called Value of the Web to collect research that sheds new light on how the Internet affects our world. It’s available in English, French, German, Russian and Spanish and currently features studies that focus on 17 different regions, the value of cloud computing in Europe and the value of search around the world. While we can’t use industrial metrics to fully capture the Web’s contributions to our information society, as my teammate Jonathan pointed out, these reports are the best existing efforts to quantify the Internet’s contributions to the economy and society thus far.
The value that is calculated in the reports ranges from the GDP contribution of the firms who provide the essential hardware and software to power the Internet, to jobs that are created due to the low cost of IT for small businesses enabled by cloud computing.

With two billion people online today and another five billion set to join them in the next 20 years, studies predict that the Internet’s contributions will be large, increasing and distributed across sectors and people in the global economy. For example, McKinsey found that Internet search, in its broadest form, accounts for $780 billion in value across the globe each year. And only 4% of that total goes to search companies—the rest goes to consumers and corporations who harness search in order to improve the way they find and use information every day.

In some cases, the reports show the enormous potential of getting more businesses online if governments take steps to encourage commercial use of the Internet or increasing access to broadband.

In other cases, the findings project exponential growth for economies that are already engaging in e-commerce online. The Boston Consulting Group predicts that by 2015, at least 10% of the British economy will be Internet-based. Universal broadband access and creating new business models that capture consumer surplus could increase the value added by the Internet by roughly £43 billion, which is just less than half what the British government spends on education today. If similar measures are adopted by the Japanese government, small businesses alone will contribute an additional ￥5 trillion to the Japanese economy in the next five years—not to mention the ripple effects.

We hope the site will become a central repository for insight derived from new measurements and data that move toward a more complete understanding of the Web’s impact. In order to fully harness the power of this medium, we need to start using these numbers to illuminate policy decisions and light a pathway for innovation.

We’ll continue developing the site by adding more improvements over time, including more languages and content. Check back frequently for updates or choose to subscribe for alerts via email.

posted by Dorothy Chou, Senior Policy Analyst at Google

Policy by the Numbers

Figuring out how much the Web is worth

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