Internet Economy Outlook 2012

OECD Internet Economy Outlook 2012

The Internet began as a way of linking different computers over the phone network, but it now connects billions of users worldwide from wherever they happen to be via portable or fixed devices. People with no access to water, electricity or other services may have access to the Internet from their mobile phone. The Internet is a multi-billion dollar industry in its own right, but it is also a vital infrastructure for much of the world’s economy. The OECD Internet Economy Outlook provides data on the evolving Internet economy, emphasises trends across the OECD area, and highlights emerging policy issues.

Wireless connections are the key source of recent Internet expansion.

Tablet PCs and smartphones are making computers ubiquitous while cloud services and mobile Internet are enabling “everything/everywhere” data access, thus paving the way for new services and applications. The two technologies that will shape the near future of connectivity are very-high-speed fibre connections being deployed closer to population areas and new high-speed wireless connections.

The expansion of mobile Internet connectivity has helped buoy the ICT sector during the crisis, with 6% growth a year in revenue between 2000 and 2011 for the top firms. ICT services is doing better than ICT manufacturing, reaching output growth of 5%-10% in 2012. Employment in the sector has benefited too, with the top firms hiring more than 14 million people worldwide in 2011, a 6% increase from 2010. Among the top ICT firms, Internet firms performed the best in terms of revenue and employment growth.

E-commerce represents an increasing share of total business revenue. Although this share is still small in many countries, it is growing generally, as is the share of businesses selling and purchasing over the Internet.

The ICT sector continues to attract venture capitalists.

ICT business R&D also continues with both Korea and Finland reaching over 1.5% of GDP.

The Internet is affecting nearly all sectors of the economy, from making hard-to-find data available online to transforming entire markets, as is occurring with music, video, software, books and news.

The Internet is reshaping the way individuals live. The shift to mobile Internet connectivity is also changing the way in which people interact and consume content, via social networking.

The Internet is affecting all sectors of the economy but ICTs in health offer particular promise.

The increasing relevance of information security and privacy at the organisational, national and international level suggests that demand for security and privacy profes-sionals will increase.

Internet development is on the cusp of a potentially large expansion to objects typically not associated with communication capabilities. Electricity plugs, automobiles and even light bulbs for instance are increasingly connected to the Internet as a way to introduce new functionality. This forthcoming third wave of Internet connectivity is expected to connect anywhere from ten to a hundred devices per family, and thousands or potentially millions of devices per company. Two enabling factors are driving this Internet of things: the ubiquity of networks and ever lower prices for the communications modules used to connect devices.

Governments increasingly fund broadband rollouts, either through direct public investment or via the modification of universal service programmes, yet there is still no widely accepted methodology or single measure to capture the whole Internet economy.