1. Socio-Economic Impact. of Internet Development Dr
Socio-Economic Impact of Internet Development Dr. Piotr Stryszowski, OECD ITU Regional Workshop on ICT Indicators Sharm ElSheik, Egypt, 8-9 June 2012
The views expressed in this presentation are those of the author and
do not necessarily reflect the opinions of the OECD or its Membership.

2. Context

3. Context
Several existing studies focus on the Internet in the context of:
its share of GDP
its impact on GDP growth.
It is important but is that all?

4. Lacking a structure to measure
Experience shows us that we are lacking tools to understand the Internet economy
Policy makers need good indicators about the relative size and socio-economic impact of the Internet

5. Size of the Internet Economy (GDP)
The share of GDP that is generated by Internet-related activities
GDP
What are the existing studies?
BCG, McKinsey, Deloitte…

6. Size of the Internet Economy (GDP)
BCG: UK Internet Economy worth GBP 100 million per year. 7.2% of GDP
Web sector delivers 3.4% of top 13 economies’ GDP

7. Dynamic, economic impact of the Internet
What is the net share of additional GDP that is generated by all Internet-related activities across the economy.
yesterday
GDP
today
Thanks to the Internet
What are the existing studies?
Mostly academic studies; econometric analysis (Czernich, Lehr, Koutroumpis…)

8. Is that all?

9. Egypt: 28 January 2011

10. Egypt: Cost of Internet shutdown
Direct impact on GDP
About USD 90 million in lost telecommunication revenues
Other impacts…
Lost revenues of business relying on the Internet
Loss of confidence/FDI
Social costs …

11. Indirect, socio-economic impact
The internet has some socio-economic impact that reaches beyond the GDP.
Two main impact areas:
• consumer surplus, and
• broader gains generated thanks to the Internet
The Internet
Broader gains:
education
environment
transparency
social capital …
Consumer surplus
happy customers

12. Indirect impact Consumer surplus
Little research has been done to quantify the economic impact on consumer surplus.
Effects scattered across sectors / areas but potentially significant.
Greestein and McDevitt (OECD, 2012) estimate a significant consumer surplus only for the Internet itself.

13. Indirect impact Broader impact areas
OECD (2012), The Impact of the Internet in the OECD countries (upcoming Digital Economy Working Paper)
The impact of the Internet on:
Environment
Education
Scientific research
Healthcare
Transparency
Social capital formation …

14. Conclusions
Measuring the size of the Internet economy is not straightforward. The measurement:
Depends on the approach taken
Can be performed at different levels
The socio-economic impact of the Internet reaches far beyond the GDP.

15. Piotr Stryszowski Directorate for Science, Technology and Industry
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