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  1. 1. Its contribution The Internet and GDP Impact www.datacenterdynamics.com is greater than energy, agriculture, Mining Derek Webster Global Data Centre Strategy, Development & Solutions
  2. 2. Every 8th couple has met through the Internet. First website & server: 1991 published by Tim Berbers Lee (UK) at CERN 4,200 new domain names registered per hour. 37 million per year. World Wide Wow a social perspective www.datacenterdynamics.com 100 years ago a person could master no more than 50 books in a lifetime. Today, a person is able to absorb information from 600,000 books (!) Average (western) digital birth (childs 1st online presence) approx 6 months old i.e. parents email pictures of new baby and posts online. 69 % of children aged 2 to 5 use a computer mouse. More young people can play a computer game (58 %) than swim (20 %) or ride a bike (52 %). The Internet and GDP impact
  3. 3. The Area of 1 Trillion pages = 37,400 km2 (23,300 m2) How BIG is the Internet ...? Kuwait It looks like this www.datacenterdynamics.com It looks like thisConsumes 170 to 307 GW Source : Berkley University Size and traffic is the weight of a The Internet and GDP impact
  4. 4. Most Trafficked Websites www.datacenterdynamics.com Websites The Internet and GDP impact Chinese sites not shown ? i.e. Beiau, Weibo
  5. 5. How BIG in an Internet Minute...? www.datacenterdynamics.com and Growing The Internet and GDP impact
  6. 6. Macro Internet Numbers ... enterprise If the Internet was a Country = global top 5 and growing faster than Global: 2.4 Billion people connected to the Internet (3 bn by 2016) $8 Trillion e-commerce transactions in 2011 Internet = 2.9% of Global GDP ($1.7 Trillion) www.datacenterdynamics.com Internet = 2.9% of Global GDP ($1.7 Trillion) 3.4% of GDP (of 13 larger economies) that = 70% of global GDP 565 million internet users in China, world #1 (more than Europe combined) Internet GDP = Sweden 7.7% & UK 7.4 8.3% Mature countries growth over last 15 years = 10% internet related The Internet and GDP impact
  7. 7. Internet 3.4% of GDP so what ? Source: OECD 2009 Sector % Contribution of Total GDP www.datacenterdynamics.com The Internet and GDP impact %
  8. 8. Internet 3.4% GDP (2009 - 13 countries) Source: McKinsey www.datacenterdynamics.com The Internet and GDP impact
  9. 9. A sharp acceleration from the 10% contribution over 15 years. Most economic value created by the Internet falls outside of the technology sector. 75% of the benefits are captured by more traditional industries. Internet : 21% GDP Growth in Developed Countries in Last 5 Years www.datacenterdynamics.com United States = largest player in the global Internet supply ecosystem, capturing 30% + of global Internet revenues and more than 40% of net income. Their global ecosystem has relatively equal contributions from hardware, software, services and telecoms. Internet Maturity = Opportunity The Internet and GDP impact
  10. 10. Internet Economy: G-20 GDP = 4.1% Source: ECU,OECD, BCG 2011 www.datacenterdynamics.com The Internet and GDP impact
  11. 11. Internet 120 bn (2012) of UK GDP or 8.3% 2012 (= 2x G-20 ave.) - Projected 219 bn (2016) = faster than the rest of UK economy to 12.4% GDP McKinsey : Internet contributed 23% to GDP growth, past 5 years UK investing more than European rivals - digital infrastructure LSE UK Spotlight www.datacenterdynamics.com UK investing more than European rivals - digital infrastructure LSE 10% of Internet users consume 50% of all data transmitted 10th most Advanced ICT nation (ITU Information Society 2012) 7th WEF Network Readiness index 2013 The Internet and GDP impact Financial Services = only 14.5% UKs GDP
  12. 12. UK $ GDP Spotlight GDP $ 2.44 trillion 6th rank (nom) * Internet : 7.4 8.3% of GDP Agriculture : 0.7% FDI Stock: $1.32tr in 3rd $1.8tr out 2nd Industry : 21.1% * Ease of doing Business = 7th Rank Services : 78.2% * Credit Rating: AA1 Outlook: Stable to - GDP per capita = $ 38,589 (23rd rank) External dept. $9.8 tr 2nd or 390%GDP GDP 2013 growth 1.5% y/y ( 2012 0.2%) France $5.6 tr 3rd or 182% GDP www.datacenterdynamics.com The Internet and GDP impact UK = worlds most Internet-dependent economy GDP 2013 growth 1.5% y/y ( 2012 0.2%) France $5.6 tr 3rd or 182% GDP
  13. 13. Internet Use - Worldwide Growth Worldwide www.datacenterdynamics.com 2012 Internet users: almost 200% growth the numbers in 5 year The Internet and GDP impact
  14. 14. Global IP - Growth 4 x 2010-15 Source: CISCO 2011 www.datacenterdynamics.com
  15. 15. Mobile Data Connected Devices Growth www.datacenterdynamics.com The Internet and GDP impact
  16. 16. Internet Connected Devices Growth (M2M) www.datacenterdynamics.com The Internet and GDP impact
  17. 17. defsff June 30, 2012 World Regions Population ( 2012 Est.) Internet Users Dec. 31, 2000 Internet Users Latest Data Penetration (% Pop) Growth 2000-2012 % Users Africa 1,073,380,925 4,514,400 167,335,676 15.6 % 3,606.7 % 7.0 % Asia 3,922,066,987 114,304,000 1,076,681,059 27.5 % 841.9 % 44.8 % Worldwide Internet Users and Population www.datacenterdynamics.com Europe 820,918,446 105,096,093 518,512,109 63.2 % 393.4 % 21.5 % Middle East 223,608,203 3,284,800 90,000,455 40.2 % 2,639.9 % 3.7 % North America 348,280,154 108,096,800 273,785,413 78.6 % 153.3 % 11.4 % Latin America Caribbean 593,688,638 18,068,919 254,915,745 42.9 % 1,310.8 % 10.6 % Oceania Australia 35,903,569 7,620,480 24,287,919 67.6 % 218.7 % 1.0 % WORLD TOTAL 7,017,846,922 360,985,492 2,405,518,376 34.3 % 566.4 % 100.0 % The Internet and GDP impact
  18. 18. Share of Internet Population Growth : 2007 2012 www.datacenterdynamics.com The Internet and GDP impact
  19. 19. Cloud - Worldwide Growth & Region Worldwide Cloud Traffic Growth Cloud Innovation Needs Fast Broadband www.datacenterdynamics.com % Source: Gartner Cloud Usage By Region The Internet and GDP impact
  20. 20. Internet : GDP Growth % Aspiring Countries Source: Gartner, OECD, WHO, ICD 2010 www.datacenterdynamics.com The Internet and GDP impact
  21. 21. Internet Maturity (broadband penetration) and GDP Growth Internet penetration has a positive impact on economic growth. (Myongji University South Korea after examining 207 countries) A clear path can be found from introducing broadband and its increased penetration to per capita GDP. (University of Munich 2009) www.datacenterdynamics.com Every 10% increase in broad band penetration adds 0.9 to 1.5% to per capita GDP growth. (World Bank) Internet = Ave $500 increase per capita GDP over the last 15 years. The Industrial revolution took 50 years The Internet and GDP impact
  22. 22. Internet Supply ecosystem impact Source: McKinsey ecosystem index Internet Contribution to GDP % www.datacenterdynamics.com The Internet and GDP impact < McKinsey ecosystem index >
  23. 23. USA = 30% of global internet revenue: most developed supply ecosystem = 40% of world ICT profits Venture capital deals: USA = 20% of total Investment (numbers and investment) Keep costs down Internet investments Numbers www.datacenterdynamics.com Keep costs down o Access a broader range of supplier access o Target Marketing : 15% marketing spending = online marketing. Broadband break-even Typical in-ground infrastructure: o4 years = Urban o8 years = Suburban o15 years = Rural The Internet and GDP impact
  24. 24. Next Generation Broadband Network (NGN) www.datacenterdynamics.com
  25. 25. USA: Levin - National Broadband Plan to Generate 1,000% ROI We spent $20 million on the plan and Congress [says] the incentive auction is worth $22 billion, said Levin. Thats a thousand-to-one return on investment and its better than Goldman will do on the Facebook IPO. March 2012 Return on Investments (ROI) Some examples Cost-benefit-ratio comparison: www.datacenterdynamics.com Malaysia: Broadband Cost-benefit-ratio: Invest MYR 2.4 billion ($800 m) GDP Impact = +1% and helps Bridge the digital divide Create 135,000 jobs (2010) The Internet and GDP impact Invest 5bn in Superfast Broadband and add 18bn to GDP and create 280,000 new jobs (indirect and indirectly) LSE, Nesta 2012 UK broadband investment = 20 of benefit for 1 spent
  26. 26. Return on Investments more examples Source: intel Brazil: Broadband services increased employment growth rate by +1% - 1.4% Latin America/Caribbean: 10% rise in broadband penetration yields +1.7% in GDP growth. China: www.datacenterdynamics.com China: Every 10% increase in dial-up & broadband penetration contributes up to 2.5% to GDP growth. Thailand: Broadband could account for approx: 1% of the GDP growth rate. Broadband Investment Services spur economic growth
  27. 27. Internet G-20 GDP % projection to 2016 Source: ECU,OECD, BCG www.datacenterdynamics.com Investment opportunities? The Internet and GDP impact
  28. 28. GDP Forward look Projection Source: World bank and PwC 2011 2030 2050 MER GDP US $ bn GDP US $ bn GDP US $ bn www.datacenterdynamics.com
  29. 29. France over the last 15 years 500,000 jobs lost to 1,200,000 created (2.4 gained for 1 lost). Global view of SMEs is 2.6 gained for 1 lost. European Commission (EC) predicts in 4 years: Internet and impact on Jobs www.datacenterdynamics.com European Commission (EC) predicts in 4 years: Will create + 2,000,000 jobs Contribute 636 billion to GDP growth Companies that fully integrate/use technology create x 2 more jobs against a neutral /negative on companies using it sparingly or not at all The Internet and GDP impact d.webster@andget.co.uk
  30. 30. Local GDP - Benefits of Hub Data Centre's well, this is what happened ! Population growth 2005-07 +13% www.datacenterdynamics.com 220 new Construction jobs Approx. $1.3bn Investment Salary growth 2005-07 +8% House prices 2005-08 +30%
  31. 31. Internet