Internet Association Report: The ‘Net Has Big Economic Impact

In its first economic report, the Internet Association says internet-based businesses contribute a significant chunk of U.S. gross domestic product and generate higher average wages than the economy as a whole.

The internet is clearly a transformative tool and has been for decades, ushering in new ways to work, communicate, and do business. Now, in its first economic report, the trade group that represents the industry has put a number on the sector’s impact on the economy.

That number is 6 percent—the portion of U.S. real gross domestic product (GDP) contributed by internet-based businesses last year, according to the Internet Association.

In “Measuring the U.S. Internet Sector,” the association notes that while still a growing aspect of the economy, the internet is proving to be a mighty economic force.

“The results of this study are incredibly exciting for all of us who care about and advocate for the continued growth of the internet economy, its companies, and the users they serve,” Michael Beckerman, the association’s president and CEO, said in a news release.

The study, conducted by the consulting firm Economists Incorporated on the Internet Association’s behalf, is based on official government data. Among the highlights:

The internet sector is growing rapidly. Internet-based businesses contributed $847.5 billion in real GDP in 2012. And that figure keeps rising; in 2014 the sector contributed $966.2 billion (6 percent) of the country’s real GDP, more than double what it contributed to the economy in 2007. What’s more, in 2012 internet-based businesses beat out other established industries such as construction, electronics, and broadcasting and telecommunications in contributions to nominal GDP.

U.S. internet usage is far above the rest of the world. According to the study, 43 percent of the world’s population uses the internet, but the United States is far more active online, with roughly 92 percent of Americans, or 299 million people, going online frequently.

The information superhighway is a great place to work. The number of employees in the internet sector jumped 107.9 percent between 2007 and 2012, a period when employment in competing sectors decreased. The industry, which employed nearly 2.9 million people in 2012, also offers above-average wages compared with others. On average, workers at internet-based companies got paid more in 2012 ($79,515) than did workers in the economy as a whole ($61,547), according to the report.

“The internet often has an ‘everywhere but nowhere’ feel; however, in reality, jobs in the internet sector have doubled, contributions to real GDP have increased by more than twofold, and employee wages far surpass the national average,” Beckerman said.

The Internet Association’s membership includes more than three dozen companies, including Airbnb, Amazon, eBay, Etsy, Facebook, Google, LinkedIn, Netflix, PayPal, Twitter, and Yahoo.


Patrick deHahn

By Patrick deHahn

Patrick deHahn is a contributor to Associations Now. MORE

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