The Internet accounted for 21 percent of gross domestic product growth in the world's largest economies over the last five years, according to a new McKinsey report.
That's more than the GDP of Spain or Canada, and at a rate of growth stronger than that of Brazil.
The report explains how "big data" -- the buzzword of 2011 that means the large datasets generated from every customer, device and network -- will fuel the Internet's next stage of growth.
Authors James Manyika and Charles Roxburgh write:
Most of this "big data" will be processed not in individual computers but in "the cloud," computing power provided through networks rather than on a local computer. The rise of cloud computing facilitates a new wave of innovation whereby functions such as e-mail and contact management are provided as a service and users can more fluidly collaborate in real time. Cloud computing and other collaboration technologies promise to increase the efficiency and effectiveness of workers in knowledge-based activities through shared virtual workspaces and social networks. These technologies can also improve educational services, giving young and adult students alike access to low-cost content, online instructors, and communities of fellow learners. Cloud services can also greatly reduce the cost of acquiring new applications, for both large and small enterprises alike, by allowing them to pay for services "on demand." The actual amount of capital required to start an IT-enabled business has plummeted by an order of magnitude, because an entrepreneur often no longer needs to purchase services, software, and other IT infrastructure.
The report says that, as an industry, the Internet is more impactful to a developed economy than the mining, utilities, agriculture or education industries.
But there's still more to be done, according to McKinsey. More countries need to make their markets open and competitive to enable productivity. Policymakers need to nurture entrepreneurship -- and allow an environment that helps it survive, from startup capital to R&D funding to intellectual property rights -- to capture Internet-related growth. Human capital must be both attracted and developed. And infrastructure must of course assist in helping citizens access and spur this growth.
For most English-speaking readers of ZDNet, the good news is that growth is strongest in the United States (online revenues) and the United Kingdom (online retail spend). But India and China are growing the fastest, and the question is which companies will help them get there (and what route they'll take).
The Great Transformer [McKinsey & Co.]