According to a new report by the Boston Consulting Group, the Internet economy of the G-20 nations will reach $4.2 trillion by 2016.
The report, “The $4.2 Trillion Opportunity: The Internet Economy in the G-20.” estimates that by this year, there will be over 3 billion web users, in comparison to 1.9 billion in 2010.
In 2011, the Internet economy accounted for approximately $2.5 trillion across the G-20 nations. This predicted $4.2 trillion value is an increase of approximately 1.7 times based on expectations last year.
The Internet appears to be considered by the West as a basic resource, and one that would not lightly be given up. Over two-thirds of U.S. citizens would sacrifice their coffee, and 21 percent would rather give up sex for a year than lose their Internet connection. 17 percent of citizens would be happy to go without showering for a year rather than experience losing their online access.
BCG interviewed approximately 1,000 online users in each G-20 country. The survey says that U.S. consumers would demand $2,500 if they were expected to stay offline for one year, and others would expect varying percentages of their annual income. UK users would expect £2175 ($3444).
The report highlights how online connectivity is expanding in a way that users are now increasingly reliant on the financial facilities available. All respondents said they value search functions, e-mail, online banking and investment opportunities provided by companies who maintain an online presence.
BCG states that the report:
“[..] quantifies gains — economic growth, consumer value, and jobs –in the context of the economies of the G-20. It demonstrates that no one — individual, business, or government — can afford to ignore the ability of the Internet to deliver more value and wealth to more consumers and citizens more broadly than any economic development since the Industrial Revolution.”
Businesses are connecting more readily to their customers through online portals, such as social networking sites like Facebook and Twitter, and search engines including Google. In terms of online purchasing, the UK saw the largest economic contribution, at 8.3 percent of GDP.
UK consumers conducted 13.5 percent of their purchases online in 2010, and this is predicted to rise to 23 percent by 2016.
Mobile access is also increasingly important for Internet users, with smartphones and tablets predicted to account for 4 out of every 5 connections by 2016.
BCS found that the younger generation and older consumers value the Internet most. Whereas the younger generation view online connectivity as a basic service — in the same manner as an electricity supply or water — the older generation value it as a new, valuable tool.
The Internet economies of developing G-20 markets are expected to increase substantially by 2016. The report suggests that these markets are expected to grow at an average rate of 17.8 percent. Argentina and India are predicted to house the most rapid growth rates; at 24.3 percent and 23 percent respectively.
By 2016, these markets are expected to contribute 34 percent of the total G-20 Internet economy.
The report can be downloaded at bcg perspectives.
Image credit: Clemens v. Vogelsang