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2012-01-27 06:32:45
By Tim Weber Business editor, BBC News website, Davos
The value of the web economy in G20 countries will nearly double by 2016,
according to Boston Consulting Group.
Driving the spurt from $2.3tn ( 1.5tn) to $4.2tn ( 2.7tn) will be the rapid
rise of mobile internet access.
The study, commissioned by web giant Google, assumes that in four years 3bn
people will be using the internet, or nearly 50% of the world's population.
The research suggests that the UK is one of the most advanced e-commerce
economies.
Right now, every year about 200 million people are going online for the very
first time.
However, traditional internet access via a copper wire and a desktop PC will
fade into the background.
The rapid fall in the cost of smartphones - with cheap versions now costing
about $100 - means that by 2016 about 80% of all internet users will access the
web using a mobile phone.
The research does not even account for web access using so-called feature
phones.
The 'new' internet
These numbers look impressive, but they are still just a fraction of the global
economy.
Start Quote
We don't fill empty holes on websites any more, we engage customers
Michael Lazerow Chief executive of Buddymedia
The searh for e-commerce 3.0
In 2010, the internet economy in the G20 group of leading nations was worth
$2.3tn - larger than the economies of Italy or Brazil, but a mere 4.1% of the
total size of all G20 economies.
The Boston Consulting Group (BCG) reseachers speak of the emergence of a "new
internet" where:
web access will not be a luxury any more
the majority of web users will live in emerging markets (within four years,
China is expected to be home to 800 million people using the internet; that is
more than the United States, India, France, Germany and the UK taken together)
about 80% of all internet users will access the web from a mobile
the internet will go social, and allow customers and companies to engage with
each other
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.
Start Quote
Understanding the economic potential of the web should be an urgent priority
for leaders
Patrick Pichette Google chief financial officer
Technology giant IBM estimates that by 2015, one trillion devices will be
internet-connected.
Online is also reaching into the offline world. The BCG researchers say that
every household already researches about $3,000 worth of goods online before
buying them in traditional stores.
Digital, the researchers say, cannot be an add-on. Businesses have to adapt
their people, processes and structures for the digital economy.
Paul Zwillenberg of BCG says that entrepreneurs building a digital business are
outperforming rivals who do not embrace the web economy.
However, what the research fails to capture is the balance of employment
between new, more efficient digital companies and old-style businesses.
The winners
Google, who commissioned the research, is obviously one of the companies set to
gain most from the rapid growth of the internet.
"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," Patrick Pichette, Google's chief
financial officer, says.
However, the report suggests that Google will not be the only winner.
The researchers identify several "internet ecosystems" that will try to tie
users in to their customised part of the internet, among them Amazon, Apple,
Facebook, Google, Baidu and Tencent in China and Yandex in Russia.
What is digital?
A problem with BCG's research is obviously that it is difficult to define what
is actually part of the digital economy.
"During the research we discovered very quickly that there is no approved way
of measuring the internet economy," says David Dean, a managing director at
BCG.
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.
But if the report's predictions are correct, then speaking of a "web economy"
will soon sound about as comical as speaking of an "electricity economy".
David Dean believes that the G20 countries could reach this moment as early as
2020.