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The internet's global impact is felt and recognized in all aspects of life. The internet, according to Mun, Chun, and Cho (2014), has revolutionized the way people socialize, work, share information, conduct business, and arrange the flow of ideas. The internet's evolution/penetration rate appears to have been amazing, with about a third of the human population accessing it. As more individuals connect on to the internet, the manner businesses are conducted in this digital realm has evolved. Furthermore, the advancement of information technology and communication media has bolstered the function of the Internet connection in promoting company continuity (Jorgenson & Vu, 2016). Most of the organizations have adopted the use of the Internet to conduct their daily routines, such as marketing and promotion, selection and recruitment, sharing of information and selling of business products. While national economies and large organizations have acquired significant merits from the internet revolution, consumers, individuals, and upcoming entrepreneurs have also been beneficiaries of the Internet usage.
Effect of Internet Revolution in the Economy
From a network of technology experts and researchers, three decades ago, the internet has turned to be part of peoples’ lives, where more than a third of the world human population uses it in their day to day activities. Today, approximately 3.5 billion individuals access and use the internet, where almost $10 trillion trade yearly through e-business and e-commerce (Leamer, & Storper, 2014). As a result, the use of the internet has brought about remarkable impacts to the economy in various ways as explained below.
Created employment opportunities: Most of the world economies are struggling with high unemployment rates for the youths. The rate of population growth is not proportional to the economic job absorption rate. Currently, more than 1.2 million people in the US get employment from the internet to conduct marketing and promotion activities, build and maintain infrastructure, at the same time facilitate its use (Jorgenson, & Vu, 2016). Again, a single job from the Internet fosters additional 1.54 job vacancies elsewhere in the world economy. Therefore, approximately 2% or a total of 3 million US residents get their earnings from e-commerce and advertising. The dollar value of the Americans who get their income from the internet is $300 billion, which is around 2% of the US GDP (Manyika & Roxburgh, 2012). Again, there are many other means of getting money through the internet such as blogging, visual recording, Forex trades, and the like.
Convenient and cheaper transactions; payment values: The most significant Internet attribute is it transmit information quickly, inexpensively, and conveniently. The world economy has routine operations, such as processing and transmitting financial information, making payments, and financial record maintenance, which with the web-based technology gets handled less expensively and conveniently. Moreover, the internet directly or indirectly generates economic activities that are conducted elsewhere across the world. As a result, transactions need to be made worldwide with viable payment wallets. The revolution of the internet has facilitated convenient payment of all transactions conducted globally, where one can receive or make payment of any state, anytime, despite the distance or the currency.
The use of the Internet and efficient management: Currently, organizations and agencies are using the internet as the management tool in the form of applications, which have substantial potential for improving efficiency and effectiveness in many sectors of the economy (Nica, 2015). For instance, most of the potential efficiency gains result from the internet-based technology, which aids to effectively managing supply chains by reducing the inventory levels. These saving arising from inventory management may show up to the firm, which leads to positive impacts on the consumers and the economy at large. Again, the Web is used successfully in various industries to connect the partners in joint ventures across the world, which enables them to integrate operations and share production schedules. As a result, different world economies benefit due to the advancement and the revolution of the internet.
Make the markets more competitive: According to Atkinson & Stewart (2013), one of the essential features of the web revolution is its ability to make the whole economic system international and more competitive by eliminating monopoly powers. Apparently, if the prices of the given products or services are accessible and available online, the customers can land to the best deal over a wide variety and geographical area. On the other hand, the suppliers can reach a larger audience or clients. The internet brings the world markets closer, which advocates for perfect competition, leading to lower profit margins for the producers, greater consumer satisfaction, and efficient production (Audretsch & Welfens, 2013). Therefore, the internet is a significant equalizer, which eliminates or lower economic barriers to competition, fostering perfect competition in the whole world market.
Increased choices and brings convenience to consumers: To avoid customers’ exploitation, having a variety of similar products is essential. As stated by Naranjo (2015), the introduction and growth of internet retailers like the buy.com, Amazon, Alibaba, among others, make it obvious for one to forecast a significant increase in retail productivity and competition. However, studies affirm that the price differences may be minimal, but puts the consumers in a position to go for the best retailer providing the best commodities. Any economy aims to make sure that the users of every product or services are satisfied; therefore, the introduction of more online shopping roofs brings happiness to the consumers.
How the Internet Revolution Foster Economic Growth
To most of the developed economies in the world, the web connection has exerted a substantial influence on the economic growth rates. According to Manyika & Roxburgh (2012), across the big economies, the internet accounts for 70% of the global gross domestic product, which is equal to 3.5% GDP. For fifteen years ago, the internet accounted for 10% of GDP growth and its positive influence has been continuous. Apparently, the internet contribution growth for the larger economies over the past five years doubled to 21%. In some nations such as Malaysia, Turkey, and Mexico, where GDP per capita and the web usage are below the medium range of the world economy scale, the internet evolution has also significantly contributed to the economic growth, though at a lower degree or pace (Manyika & Roxburgh, 2012). There is notable variation among countries on GDP growth, but every nation leaves a tremendous room for further growth based on the internet use.
The internet revolution has improved the people’s living standards (Internet ecosystem maturity relates to improved life). There is a direct correlation between the maturity of the web usage and the improved people’s life. Studies affirm that an upsurge in the internet growth to the advanced economies for the past 15 years or so connects with an increase of $500 real per capita GDP (Hawken, Lovins, & Lovins, 2013). Nevertheless, it took more than 50 years for the industrial revolution to achieve such a remarkable growth. As a result, this shows the positive impact that the revolution of the internet delivers to all the stakeholders and the rate by which it grows.
The internet has driven the economic modernization and business transformation. The revolution of the internet has enhanced business change and transformation, which spur value to all companies and sectors of the economy. The change includes on how products and services get designed, produced, bought, distributed, and sold (Jung, López & Grazzi, 2017). In fact, a small enterprise can also operate with an efficient supply chain management system, making it function globally. Again, the internet has served as the primary catalyst in job creation. For instance, the internet companies, such as Google, Microsoft among others hire staffs ranging from the sales personnel whose work is to deliver internet commodities, the engineers, specialists, among others. Surveys conducted found that, for the past fifteen years in the French economy, the Internet destroyed more than five hundred thousand jobs, but in return, it created 1.2 million new jobs. It means the internet revolution has significant positive impacts on the economies of the whole world (Manyika & Roxburgh, 2012).
The revolution of the internet has shown significant effects on shaping the economy and the society as a whole. The advantages associated with the use of the web has resulted in economic growth, employment creation, economic modernization, among other positive results. However, the potential of the internet to our economies is not yet fully utilized. In fact, every day, new opportunities emerge, which are facilitated by the Web connection to change the lives of many individuals. Therefore, the governing bodies, policy makers, large and small enterprises should identify and embrace the opportunities created by the internet, and make use of them for economic benefit. Nevertheless, as the web revolution has demonstrated for the past two decades, various economies with the help of the respective governments should facilitate and nurture the expansion of a healthy internet environment, which creates competition, boosts infrastructure, and let the entrepreneurs and the innovators thrive or nature the human capital.
Atkinson, R. D., & Stewart, L. A. (2013). Just the facts.
Audretsch, D. B., & Welfens, P. J. (Eds.). (2013). The new economy and economic growth in Europe and the US. Springer Science & Business Media.
Hawken, P., Lovins, A. B., & Lovins, L. H. (2013). Natural capitalism: The next industrial revolution. Routledge.
Manyika, J., & Roxburgh, C. (2012). The great transformer: The impact of the Internet on economic growth and prosperity. McKinsey Global Institute, 1.
Jorgenson, D. W., & Vu, K. M. (2016). The ICT revolution, world economic growth, and policy issues. Telecommunications Policy, 40(5), 383-397.
Jung, J., López-Bazo, E., & Grazzi, M. (2017). Internet and enterprise productivity: evidence from Latin America. IREA–Working Papers, 2017, IR17/09.
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Naranjo, D. (2015). The Impact of Technology on Consumerism. The city University of New York.
Nica, E. (2015). ICT innovation, internet sustainability, and economic development. Journal of Self-Governance and Management Economics, 3(3), 24-29.
Mun, S. B., Chun, H., & Cho, J. (2014). The Effects of Internet Use on Productivity and Growth at the Firm Level.
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