Web economy in G20 set to double by 2016

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An article on the BBC website today, based on research by Boston Consulting Group and commissioned by Google, claims that the value of the web economy in G20 countries, will double from $2.3tn (£1.5tn) to $4.2tn (£2.7tn) by 2016. A major part of this growth is expected to be through the increasing use of mobile internet.

Key areas for growth

Some of the areas highlighted by the report include:-

  • 80% of internet users will be able to access the web via a mobile phone by 2016
  • More than 3 billion people will be connected to the internet globally within the next four years
  • Most web users will be in emerging economies such as China
  • The internet will be social, meaning that customers and companies will engage with each other

These are quite fascinating numbers and bear some relation to our previous blog posts about the rise and rise of internet and social sites in our everyday lives. According to the report, IBM have also predicted that there will be more than 1 trillion internet connected devices the year before that in 2015.

Everything connected to the internet

As well as our day to day devices being connected to the web, they predict that online will also reach into the offline world, beyond the current level. The BCG researchers estimated that households already research about $3,000 worth of goods online before buying them in traditional retail stores. A couple of quotes from the article which really make an impact for us are:-

“Digital, the researchers say, cannot be an add-on. Businesses have to adapt their people, processes and structures for the digital economy.”

“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.

How does this affect me and my business?

So, having absorbed all of this information, if you run a business, you might be forgiven thinking it’s time to call it a day, or you might see it as amazing opportunity, but there is one amazing thing that the report mentions, that gets a little overlooked amongst all of these huge numbers.

The entire web economy we are talking about – $2.3 trillion – is only 4.1% of the total size of the G20 economies. If you read our article a couple of years ago, according to Google, only 17 pence in each pound spent was online. That number was based on Google’s research at the time and this research would appear to reinforce the fact that still today, three years later, much more money is generated away from the internet than through it.

We had noticed a greater and greater proportion of spend moving online back in 2008, and this seems to have continued, though maybe this is part of the reason our economies are struggling. Bearing in mind that much of the revenue from online marketing is generated by US based companies, in the UK, should we be looking at growing our own offline marketing spend to target our future customers?

Let us know what you think about this in the comments below.

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About the Author:

KnowledgeBank work with Companies to develop their data driven marketing solutions to generate profitable new customer relationships. We also deliver social media training, consultancy and strategy to hundreds of businesses across the UK. If you would like further information about how you can develop your own marketing activity or social media, please contact us on 01772 978 101.