Worldwide web boosts Australian economy

Eden Estopace
25 Aug 2011
The internet contributed AU$50 billion ($52 billion), or approximately 3.6% of Australia's Gross Domestic Product in 2010. This provided huge benefits to the public sector, especially for education, healthcare and disaster response, according to a new report released recently by Deloitte Access Economics.
Commissioned by Google Australia, the report "The Connected Continent: How the Internet is Transforming Australia's Economy," is the first to measure effects the Internet had on the Australian economy and follows a similar report on Hong Kong released last May, as well as other reports across Europe.
According to the report, household consumption, which comprises goods and services bought by households over the Internet, formed largest component of the Australian Internet economy, representing 2.6% of GDP and roughly 70% of total expenditure. Spending by government on ICT represented a further 0.9% of GDP.
Some spending by households, businesses and governments was on goods and services produced overseas, while foreigners likewise bought some goods and services produced in Australia. "Overall, reflective of the broader economy, Australia is a net importer of e-commerce and ICT equipment, which together subtract around 1.1 percentage points from GDP," the report added.
Job creation wise, 190,000 jobs in Australia were found to be directly linked to the Internet, including IT software firms, internet service providers, and companies providing e-commerce and online advertising services. These jobs generated AU$22 billion towards the local economy.
Other wider benefits cited in the report but fully captured in GDP calculations include: approximately $27 billion in productivity increases to businesses and government in the form of improvements to operation and service delivery, the equivalent of $53 billion in benefits to households in the form of added convenience and access to an increased variety of goods and services and information.
Deloitte Access Economics said it used the expenditure method in the study, which measured the amount spent by consumers, businesses, government and overseas residents on internet related goods and services produced in Australia. This method has been used by Boston Consulting Group and McKinsey to measure the size of the Internet in other countries.
The optimistic forecast is for the Internet's contribution to the Australian economy to grow to around 7 % per year to reach AU$70 billion by 2016.


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