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It’s contribution

The Internet and GDP Impact

www.datacenterdynamics.com

is greater than

energy, agriculture,

Mining …

Derek WebsterGlobal Data Centre Strategy,

Development & Solutions

� 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


� 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” (child’s 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

The Area of …

1 Trillion pages = 37,400 km2 (23,300 m2)

How BIG is the Internet ...?

Kuwait

It looks like this


It looks like thisConsumes

170 to 307 GW

Source : Berkley University

Size and traffic is the weight of a


Most Trafficked Websites


Websites


Chinese sites not shown ?

i.e. Beiau, Weibo …

How BIG in an Internet Minute...?


and Growing … The Internet and GDP impact

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)


� 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


Internet 3.4% of GDP … so what ? Source: OECD 2009

Sector % Contribution of Total GDP

www.datacenterdynamics.com The Internet and GDP impact%

Internet 3.4% GDP (2009 - 13 countries) Source: McKinsey

www.datacenterdynamics.com The Internet and GDP impact

� 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


� 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


Internet Economy: G-20 GDP = 4.1% Source: ECU,OECD, BCG 2011


� 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


� “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


Financial Services = only 14.5% UK’s GDP

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


UK = worlds most Internet-dependent economy

GDP 2013 growth 1.5% y/y ( 2012 0.2%) France $5.6 tr 3rd or 182% GDP

Internet Use - Worldwide Growth

Worldwide


2012 Internet users: almost 200% growth the numbers in 5 year


Global IP - Growth 4 x 2010-15 Source: CISCO 2011


Mobile Data – Connected Devices Growth


Internet – Connected Devices Growth (M2M)


defsff

June 30, 2012

World RegionsPopulation( 2012 Est.)

Internet UsersDec. 31, 2000

Internet UsersLatest Data

Penetration(% Pop)

Growth2000-2012

% 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


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 AmericaCaribbean

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 %


Share of Internet Population Growth : 2007 – 2012


Cloud - Worldwide Growth & Region

Worldwide Cloud

Traffic Growth

Cloud Innovation Needs Fast Broadband


%Source: Gartner

Cloud Usage

By Region


Internet : GDP Growth % Aspiring Countries Source: Gartner, OECD, WHO, ICD 2010


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)

�


�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


Internet Supply ecosystem impact Source: McKinsey ecosystem index

Internet Contributionto GDP %


< McKinsey ecosystem index >

�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 …


�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


Next Generation Broadband Network (NGN)


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. “That’s a thousand-to-one return on investment and it’s better than Goldman will do on the Facebook IPO.” … March 2012

Return on Investments (ROI) Some examples

Cost-benefit-ratio comparison:


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)


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

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:


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 …

Internet G-20 GDP % projection to 2016Source: ECU,OECD, BCG


Investment opportunities…?


GDP Forward look Projection Source: World bank and PwC

2011 2030 2050

MER GDP US $ bn GDP US $ bn GDP US $ bn


� France over the last 15 years

500,000 jobs lost to 1,200,000 created (2.4 gained for 1 lost).

� Global view of SME’s is 2.6 gained for 1 lost.

� European Commission (EC) predicts in 4 years:

Internet and impact on Jobs


� 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 [email protected]

Local GDP - Benefits of Hub Data Centre's

… well, this is what happened !

� Population growth 2005-07 +13%


� 220 new Construction jobs

� Approx. $1.3bn Investment

� Salary growth 2005-07 +8%

� House prices 2005-08 +30%

Internet & ICT for the Global Good…

� United Nations: Internet penetration = key metric to reduce

poverty and encourage rational development.

� Smart 2020 Report: ICT Potential to reduce global emissions

(7.8 Gt by 2020) by 15%.

� ICT is part of the solution to climate change:


� ICT is part of the solution to climate change:

• Transformative ICT solutions examples:-

o E-commerce : -1 bn tonnes CO2e

o Virtual meetings & remote working: -0.5 bn tonnes CO2e

o Smart Grid: -2 bn tonnes CO2e

o Smart Motors: - 0.97 bn tonnes CO2e

o Smart Buildings: -1.7 bn tonnes CO2e

o Smart Transportation: -1.52 bn tonnes CO2e


Thank you ...

GDP Impact... do


doGovernments

get it ??

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