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Connecting to the InternetChristopher Hooton / March 2018
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Connecting to the internet
A look at what’s changing in the technology industry and how it’s changing everything
• Sector• Process• Partnerships• Skills• Infrastructure• Trends
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The only trade association that exclusively represents leading global internet companies on matters of public policy.
Sector
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Total Membership 40+Total Average
Market Cap. & Valuation $2.9 trillion $66.5 billionAnnual Revenue $439 billion $10.2 billion Annual Profit $60.3 billion $1.4 billionDirect Employees ~ 750,000 ~ 17,500 Number of Users 10.5 billion 243.5 million
Sector
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Sector
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Sector
• 2007-2012: Internet employment % grew 7x faster
than next closest industry
• 2007-2014: Internet GDP doubled
• 2014: $1 trillion VA, 6% of GDP, 3 million employment
• 2017: 3-3.6 million employment, 24 million online
income positions
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2.94
3.8
4.7
7.1
5.546
5.4
5.7
4.1 5.3
3.4
0.00
1.00
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2006 2008 2010 2012 2014 2016 2018 2020
% G
DP C
ON
TRIB
UTI
ON
ANALYSIS YEAR
Internet Sector GDP Contribution Estimates by Year
United States EU G-20 13 Large Economies
Construction Sector Federal Gov. Sector Health Care & Social Assistance Linear (United States)
Sector
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Connecting to the internet
More meaningful connections
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Process.
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Moving very fast
The internet is experiencing exponential growth as an economic sector.
Process
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Moving very fast
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Internet Component Growth vs Traditional Growth Metrics
Nordhaus Computation Index Data Volume (Zettabyte) Gross Domestic Product per Capita Population IOT Devices
Process
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Process is digital technology’s most important product.
Process
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Process. Digital technology’s most important product.
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Partnerships.
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Partnerships
Some of the most high-tech industries aren’t ‘tech’ at all
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The largest worldwide customers for IT goods and services over
the past several years have been:
• Manufacturing & Natural Resources Industry ~ $500 billion
• Banking and Securities Industry ~ $500 billion
• Government ~ $450 billion
• Communications: Media Services Industry ~ $450 billion
(Gartner, 2017)
Partnerships
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Partnerships
Internet sector employment and productivity are less tied to population than traditional employment
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Partnerships
AV technology combined with ridesharing systems could reduce vehicular traffic by 90% while moving the same volume of people. ~ OECD
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PartnershipsThe costs of data breaches across all industries would grow from $5.5 billion per year (2006-2015) to over $3.4 trillion by 2020
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Partnerships. Tech isn’t just for tech
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Skills.
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Skills
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Labor skills to fill open positions
Technical skills of senior managers
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PhD is the new MBA
Cloud and Distributed ComputingStatistical Analysis and Data Mining
Social Media MarketingMobile Development
Middleware and Integration SoftwareWeb Architecture and Development Framework
User Interface DesignSEO/SEM Marketing
Network and Information SecurityStorage Systems and Management
Perl/Python/RubyData Engineering and Data Warehousing
Marketing Campaign ManagementAlgorithm Design
Business IntelligenceData PresentationJava Development
Mac, Linux and Unix SystemsDigital and Online Marketing
RecruitingShell Scripting Languages
Software Revision Control SystemsDatabase Management and Software
VirtualizationSoftware QA and User Testing
EconomicsComputer Graphics and Animation
Electronic and Electrical EngineeringBusiness Development/Relationship Management
Channel MarketingRetail Payment and Information Systems
Web ProgrammingC/C++
SAP ERP SystemsPR and CommunicationsIntegrated Circuit Design
Software Engineering ManagementSoftware Modeling and Process Design
Information SecurityAutomotive Services, Parts and Design
Game DevelopmentCorporate Law and Governance
Skills
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0.00000
0.20000
0.40000
0.60000
0.80000
1.00000
1.20000
1.40000
1.60000
1.80000
2.00000
Most Sought After Skills 2013-2017
2013 2014 2015 2016 2017
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Statistical Analysis and Data Mining
Cloud and Distributed Computing
Middleware and Integration Software
0.00000
0.10000
0.20000
0.30000
0.40000
0.50000
0.60000
2013 2014 2015 2016 2017
Top 10 Skills 2013-2017
Statistical Analysis and Data Mining Cloud and Distributed Computing Social Media Marketing Mobile Development
Middleware and Integration Software Storage Systems and Management Perl/Python/Ruby User Interface Design
Business Intelligence Data Engineering and Data Warehousing
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Skills. PhD is the new MBA
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Infrastructure.
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InfrastructureIA Ease of Doing Internet Business Rank State
CNBC Top States for
Business 2016
Forbes Best States for
Business Rank
NSF Science & Technology Assessment
CTA Innovation Scorecard*
1 Colorado 3 5 2 2
2 Washington 6 10 18 2
3 Utah 1 1 9 1
4 Maryland 30 33 4 2
5 Massachusetts 20 18 6 1
6 Delaware 37 17 1 1
7 Connecticut 43 39 17 3
8 New Jersey 34 41 5 3
10 California 32 32 7 3
*Scores are assigned based on 4 categories: 1 = Innovation Champion, 2 = Innovation Leader, 3 = Innovation Adopter, 4 = Modest Innovator
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R² = 0.1848
$-
$20,000
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Stat
e GD
P Pe
r Cap
ita ($
USD
)
EDIB Index (0 to 100; 100 = best)
Relationship of the Ease of Doing Internet Business and Economic Productivity
R² = 0.4293
$-
$2,000.00
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$14,000.00
0.00 20.00 40.00 60.00 80.00 100.00
Inte
rnet
Sec
tor G
DP P
er C
apita
($ U
SD)
EDIB Index (0 to 100; 100 = best)
Relationship of the Ease of Doing Internet Business and Internet Sector Productivity
Infrastructure
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Infrastructure
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Infrastructure. First, you have to connect.
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Trends.
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Moving very fast
The internet sector, digital economy, technology sector, etc. are not formally measured or defined.
Trends
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0
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Hires Rate (%)
Series1 Series2 Series3
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Job Openings Rate (%)
Series1 Series2 Series3
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Separations Rate (%)
Series1 Series2 Series3
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0
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1
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Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q1
2012
= 1Internet Sector - Total Revenue - Index
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Q4 2012
Q4 2013
Q4 2014
Q4 2015
Q4 2016
1.5
1.6
1.7
1.8
1.9
2
2.1
Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017
Q1
2012
= 1Internet Sector - Total Revenue - Index
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Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Internet Sector - Total Revenue % Change
Total Revenue % Change Moving Average
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Trends. Trending…trending…
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What’s changing in the technology industry?
1. Rapid shift to digital
2. New: Process, Partners, Skills, & Infrastructure
3. Scratching surface on understanding sector
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Connecting to the InternetChristopher Hooton, Ph.D.www.internetassociation.org
@hooton_chris