Web economy to double by 2016
A new study from Boston Consulting Group, commissioned by Google, estimates that the value of the web economy in the leading [G20] countries is set to double by 2016. The study predicts this growth, from £1.5 Trillion to £2.7 Trillion, will be driven largely by the increase in mobile phone users as the cost of smartphones continues to fall – cheaper versions now cost only $100. By 2016 it’s anticipated that 80% of all internet users will access the web using a mobile phone.
The study also estimates that by 2016 nearly 50% of the world’s population will be using the internet given that around 200 million people a year are going online for the very first time. The report outlines of the emergence of a “new internet” in which web access will not be seen as a luxury and that the majority of web users will live in emerging markets – by 2016 China is expected to be home to 800 million users which is more than the US, India, France, Germany and the UK combined although the research further underlined the UK’s position as one of the most advanced e-commerce economies.
The internet will continue its move towards social allowing customers and companies to engage with each other. The report also states that “this trend will be coupled with another huge technology shift that will fundamentally change the nature of how to run a business – the rise of the so-called “internet of things”, where all kinds of devices from sensors to cars to radiators will be connected to the web…technology giant IBM estimates that by 2015, one trillion devices will be internet-connected.”
The impact of the online world is also affecting the offline one as the research shows that every household also researches many purchases online before buying them in traditional stores. This aspect is difficult to quantify, according to David Dean,a managing director at BCG: “During the research we discovered very quickly that there is no approved way of measuring the internet economy…official statistics simply do not capture the sideways move of old technologies into the digital world, for example when a widget maker starts upgrading its devices so that they can be hooked up to the internet.”
The report concludes that businesses have to adapt to the digital economy by changing their people, processes and structures to meet its demands highlighting that entrepreneurs building a digital business are outperforming rivals who do not embrace the web economy and that referring to the “web economy” will soon sound as comical as speaking of an “electricity economy”.
“Understanding the economic potential of the web should be an urgent priority for leaders… with a powerful case for countries and companies to get online and reap the rewards of an age of data,” states Patrick Pichette, Google’s chief financial officer.
