DCD London DWebster 2013 GDP

www.datacenterdynamics.com

It’s contribution is greater than

energy, agriculture, Mining …

The Internet and GDP Impact

Derek Webster

Global Data Centre Strategy, Development & Solutions


Every 8th couple has met through the Internet.

First website & server: 1991 published by Tim Berbers Lee (UK) at CERN

4,200 new domain names registered per hour. 37 million per year.

100 years ago a person could master no more than 50 books in a lifetime. Today, a person is able to absorb information from 600,000 books (!) …

Average (western) “digital birth” (child’s 1st online presence) approx 6 months old i.e. parents email pictures of new baby and posts online.

69 % of children aged 2 to 5 use a computer mouse. More young people can play a computer game (58 %) than swim (20 %) or ride a bike (52 %).

World Wide Wow… a social perspective

The Internet and GDP impact


The Area of … 1 Trillion pages = 37,400 km2 (23,300 m2)

How BIG is the Internet ...?

It looks like this

Kuwait

Consumes

170 to 307 GW

Source : Berkley University

Size and traffic is the weight of a


It looks like this


Most Trafficked Websites


Chinese sites not shown ?

i.e. Beiau, Weibo …

http://www.peer1.com/blog/wp-content/uploads/PEER-1-Hosting_4-11_5.png


How BIG in an Internet Minute...?

and Growing … The Internet and GDP impact


Macro Internet Numbers ... enterprise

If the Internet was a Country = global top 5… and growing faster than

Global: 2.4 Billion people connected to the Internet (3 bn by 2016)

$8 Trillion e-commerce transactions in 2011

Internet = 2.9% of Global GDP ($1.7 Trillion)

3.4% of GDP (of 13 larger economies) that = 70% of global GDP

565 million internet users in China, world #1 (more than Europe combined)

Internet GDP = Sweden 7.7% & UK 7.4 – 8.3%

Mature countries growth over last 15 years = 10% internet related The Internet and GDP impact


Internet 3.4% of GDP … so what ? Source: OECD 2009


Sector % Contribution of Total GDP

%


Internet 3.4% GDP (2009 - 13 countries) Source: McKinsey



A sharp acceleration from the 10% contribution over 15 years.

Most economic value created by the Internet falls outside of the technology sector. 75% of the benefits are captured by more traditional industries.

United States = largest player in the global Internet supply ecosystem, capturing 30% + of global Internet revenues and more than 40% of net income. Their global ecosystem has relatively equal contributions from hardware, software, services and telecoms.

Internet : 21% GDP Growth in Developed Countries in Last 5 Years

Internet Maturity = Opportunity



Internet Economy: G-20 GDP = 4.1% Source: ECU,OECD, BCG 2011



Internet £120 bn (2012) of UK GDP or 8.3% 2012 (= 2x G-20 ave.)

- Projected £219 bn (2016) = faster than the rest of UK economy to 12.4% GDP

McKinsey : Internet contributed 23% to GDP growth, past 5 years

“UK investing more than European rivals - digital infrastructure” LSE

10% of Internet users consume 50% of all data transmitted

10th most Advanced ICT nation (ITU Information Society 2012)

7th WEF Network Readiness index 2013

UK – Spotlight


Financial Services = only 14.5% UK’s GDP


UK $ GDP – Spotlight


UK = worlds most Internet-dependent economy

GDP $ 2.44 trillion 6th rank (nom) * Internet : 7.4 – 8.3% of GDP Agriculture : 0.7% FDI Stock: $1.32tr in 3rd $1.8tr out 2nd

Industry : 21.1% * Ease of doing Business = 7th Rank

Services : 78.2% * Credit Rating: AA1 Outlook: Stable to - GDP per capita = $ 38,589 (23rd rank) External dept. $9.8 tr 2nd or 390%GDP

GDP 2013 growth 1.5% y/y ( 2012 0.2%) France $5.6 tr 3rd or 182% GDP


2012 Internet users: almost 200% growth the numbers in 5 year

Internet Use - Worldwide Growth

Worldwide



Global IP - Growth 4 x 2010-15 Source: CISCO 2011


Mobile Data – Connected Devices Growth



Internet – Connected Devices Growth (M2M)



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June 30, 2012

World Regions Population ( 2012 Est.)

Internet Users Dec. 31, 2000

Internet Users Latest Data

Penetration (% Pop)

Growth 2000-2012

% Users

Africa 1,073,380,925 4,514,400 167,335,676 15.6 % 3,606.7 % 7.0 %

Asia 3,922,066,987 114,304,000 1,076,681,059 27.5 % 841.9 % 44.8 %

Europe 820,918,446 105,096,093 518,512,109 63.2 % 393.4 % 21.5 %

Middle East 223,608,203 3,284,800 90,000,455 40.2 % 2,639.9 % 3.7 %

North America 348,280,154 108,096,800 273,785,413 78.6 % 153.3 % 11.4 %

Latin America Caribbean

593,688,638 18,068,919 254,915,745 42.9 % 1,310.8 % 10.6 %

Oceania Australia 35,903,569 7,620,480 24,287,919 67.6 % 218.7 % 1.0 %

WORLD TOTAL

7,017,846,922 360,985,492 2,405,518,376 34.3 % 566.4 % 100.0 %

Worldwide Internet Users and Population



Share of Internet Population Growth : 2007 – 2012



Cloud - Worldwide Growth & Region

%

Source: Gartner

Worldwide Cloud Traffic Growth

Cloud Usage By Region


Cloud Innovation Needs Fast Broadband



Internet : GDP Growth % Aspiring Countries Source: Gartner, OECD, WHO, ICD 2010


Internet Maturity (broadband penetration) and GDP Growth

“ Internet penetration has a positive impact on economic growth”.

(Myongji University South Korea after examining 207 countries)

“A clear path can be found from introducing broadband and its increased penetration to per capita GDP”. (University of Munich 2009)

Every 10% increase in broad band penetration adds 0.9 to 1.5% to per capita GDP growth. (World Bank)

Internet = Ave $500 increase per capita GDP over the last 15 years.

The Industrial revolution took 50 years



Internet Supply ecosystem impact Source: McKinsey ecosystem index


< McKinsey ecosystem index >

Internet Contribution to GDP %


USA = 30% of global internet revenue: most developed ‘supply

ecosystem’ = 40% of world ICT profits

Venture capital deals: USA = 20% of total Investment (numbers and investment)

Keep costs down o Access a broader range of supplier access o Target Marketing : 15% marketing spending = online marketing.

Broadband break-even Typical in-ground infrastructure: o4 years = Urban o8 years = Suburban o15 years = Rural

Internet investments Numbers …



Next Generation Broadband Network (NGN)


USA: Levin - National Broadband Plan to Generate 1,000% ROI

“We spent $20 million on the plan and Congress [says] the incentive auction is worth $22 billion,” said Levin. “That’s a thousand-to-one return on investment and it’s better than Goldman will do on the Facebook IPO.” … March 2012

Return on Investments (ROI) Some examples

Malaysia: Broadband Cost-benefit-ratio:

Invest MYR 2.4 billion ($800 m)

GDP Impact = +1% and helps Bridge the digital divide Create 135,000 jobs (2010)


Cost-benefit-ratio comparison: Invest £5bn in Superfast Broadband and add £18bn to GDP and create 280,000 new jobs (indirect and indirectly) … LSE, Nesta 2012

UK broadband investment = £20 of benefit for £1 spent


Return on Investments more examples Source: intel

Brazil: Broadband services increased employment growth rate by +1% - 1.4%

Latin America/Caribbean: 10% rise in broadband penetration yields +1.7% in GDP growth.

China:

Every 10% increase in dial-up & broadband penetration contributes up to 2.5% to GDP growth.

Thailand:

Broadband could account for approx: 1% of the GDP growth rate.

Broadband ‘Investment’ Services spur economic growth …


Internet G-20 GDP % projection to 2016

Investment opportunities…?

Source: ECU,OECD, BCG



GDP Forward look Projection Source: World bank and PwC

2011 2030 2050

MER GDP US $ bn GDP US $ bn GDP US $ bn


France over the last 15 years 500,000 jobs lost to 1,200,000 created (2.4 gained for 1 lost).

Global view of SME’s is 2.6 gained for 1 lost.

European Commission (EC) predicts in 4 years:

– Will create + 2,000,000 jobs – Contribute € 636 billion to GDP growth

Internet and impact on Jobs

Companies that fully integrate/use technology create x 2 more jobs against a neutral /negative on companies using

it sparingly or not at all …

The Internet and GDP impact [email protected]


Local GDP - Benefits of Hub Data Centre's

… well, this is what happened !

Population growth 2005-07 +13%

220 new Construction jobs

Approx. $1.3bn Investment

Salary growth 2005-07 +8%

House prices 2005-08 +30%


Internet & ICT for the Global Good…

United Nations: Internet penetration = key metric to reduce poverty and encourage rational development.

Smart 2020 Report: ICT Potential to reduce global emissions (7.8 Gt by 2020) by 15%.

ICT is part of the solution to climate change:

• Transformative ICT solutions examples:- o E-commerce : -1 bn tonnes CO2e o Virtual meetings & remote working: -0.5 bn tonnes CO2e o Smart Grid: -2 bn tonnes CO2e o Smart Motors: - 0.97 bn tonnes CO2e o Smart Buildings: -1.7 bn tonnes CO2e o Smart Transportation: -1.52 bn tonnes CO2e



Thank you ...

GDP Impact... do

Governments get it ??

http://www.google.co.uk/url?sa=i&rct=j&q=light+bulb&source=images&cd=&cad=rja&docid=XZCmRB1iOJ7fKM&tbnid=k9cS5S-88T1esM:&ved=0CAUQjRw&url=http://www.123rf.com/photo_12309476_brains-in-the-light-bulb-isolated-on-white.html&ei=JS1lUcPxHoGI0AXRroHoBA&psig=AFQjCNFeXeTpkFDv3213U2AT_Kq0o5iN2w&ust=1365671569675547

DCD London DWebster 2013 GDP

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