Connecting to the InternetChristopher Hooton / March 2018

Connecting to the internet

A look at what’s changing in the technology industry and how it’s changing everything

• Sector• Process• Partnerships• Skills• Infrastructure• Trends

The only trade association that exclusively represents leading global internet companies on matters of public policy.

Sector

Total Membership 40+Total Average

Market Cap. & Valuation $2.9 trillion $66.5 billionAnnual Revenue $439 billion $10.2 billion Annual Profit $60.3 billion $1.4 billionDirect Employees ~ 750,000 ~ 17,500 Number of Users 10.5 billion 243.5 million

Sector

Sector

Sector

• 2007-2012: Internet employment % grew 7x faster

than next closest industry

• 2007-2014: Internet GDP doubled

• 2014: $1 trillion VA, 6% of GDP, 3 million employment

• 2017: 3-3.6 million employment, 24 million online

income positions

2.94

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ANALYSIS YEAR

Internet Sector GDP Contribution Estimates by Year

United States EU G-20 13 Large Economies

Construction Sector Federal Gov. Sector Health Care & Social Assistance Linear (United States)

Sector

Connecting to the internet

More meaningful connections

Process.

Moving very fast

The internet is experiencing exponential growth as an economic sector.

Process

Moving very fast

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Internet Component Growth vs Traditional Growth Metrics

Nordhaus Computation Index Data Volume (Zettabyte) Gross Domestic Product per Capita Population IOT Devices

Process

Process is digital technology’s most important product.

Process

Process. Digital technology’s most important product.

Partnerships.

Partnerships

Some of the most high-tech industries aren’t ‘tech’ at all

The largest worldwide customers for IT goods and services over

the past several years have been:

• Manufacturing & Natural Resources Industry ~ $500 billion

• Banking and Securities Industry ~ $500 billion

• Government ~ $450 billion

• Communications: Media Services Industry ~ $450 billion

(Gartner, 2017)

Partnerships

Partnerships

Internet sector employment and productivity are less tied to population than traditional employment

Partnerships

AV technology combined with ridesharing systems could reduce vehicular traffic by 90% while moving the same volume of people. ~ OECD

PartnershipsThe costs of data breaches across all industries would grow from $5.5 billion per year (2006-2015) to over $3.4 trillion by 2020

Partnerships. Tech isn’t just for tech

Skills.

Skills

Labor skills to fill open positions

Technical skills of senior managers

PhD is the new MBA

Cloud and Distributed ComputingStatistical Analysis and Data Mining

Social Media MarketingMobile Development

Middleware and Integration SoftwareWeb Architecture and Development Framework

User Interface DesignSEO/SEM Marketing

Network and Information SecurityStorage Systems and Management

Perl/Python/RubyData Engineering and Data Warehousing

Marketing Campaign ManagementAlgorithm Design

Business IntelligenceData PresentationJava Development

Mac, Linux and Unix SystemsDigital and Online Marketing

RecruitingShell Scripting Languages

Software Revision Control SystemsDatabase Management and Software

VirtualizationSoftware QA and User Testing

EconomicsComputer Graphics and Animation

Electronic and Electrical EngineeringBusiness Development/Relationship Management

Channel MarketingRetail Payment and Information Systems

Web ProgrammingC/C++

SAP ERP SystemsPR and CommunicationsIntegrated Circuit Design

Software Engineering ManagementSoftware Modeling and Process Design

Information SecurityAutomotive Services, Parts and Design

Game DevelopmentCorporate Law and Governance

Skills

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Most Sought After Skills 2013-2017

2013 2014 2015 2016 2017

Statistical Analysis and Data Mining

Cloud and Distributed Computing

Middleware and Integration Software

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2013 2014 2015 2016 2017

Top 10 Skills 2013-2017

Statistical Analysis and Data Mining Cloud and Distributed Computing Social Media Marketing Mobile Development

Middleware and Integration Software Storage Systems and Management Perl/Python/Ruby User Interface Design

Business Intelligence Data Engineering and Data Warehousing

Skills. PhD is the new MBA

Infrastructure.

InfrastructureIA Ease of Doing Internet Business Rank State

CNBC Top States for

Business 2016

Forbes Best States for

Business Rank

NSF Science & Technology Assessment

CTA Innovation Scorecard*

1 Colorado 3 5 2 2

2 Washington 6 10 18 2

3 Utah 1 1 9 1

4 Maryland 30 33 4 2

5 Massachusetts 20 18 6 1

6 Delaware 37 17 1 1

7 Connecticut 43 39 17 3

8 New Jersey 34 41 5 3

10 California 32 32 7 3

*Scores are assigned based on 4 categories: 1 = Innovation Champion, 2 = Innovation Leader, 3 = Innovation Adopter, 4 = Modest Innovator

R² = 0.1848

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Relationship of the Ease of Doing Internet Business and Economic Productivity

R² = 0.4293

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EDIB Index (0 to 100; 100 = best)

Relationship of the Ease of Doing Internet Business and Internet Sector Productivity

Infrastructure

Infrastructure

Infrastructure. First, you have to connect.

Trends.

Moving very fast

The internet sector, digital economy, technology sector, etc. are not formally measured or defined.

Trends

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Internet Sector - Total Revenue % Change

Total Revenue % Change Moving Average

Trends. Trending…trending…

What’s changing in the technology industry?

1. Rapid shift to digital

2. New: Process, Partners, Skills, & Infrastructure

3. Scratching surface on understanding sector

Connecting to the InternetChristopher Hooton, Ph.D.www.internetassociation.org

@hooton_chris