Friday, August 14, 2015

Internet Future Growth Opportunity

The Internet Economy in the G-20
The $4.2 Trillion Growth Opportunity
The Internet accounted for 21 percent of GDP growth over the last five years among the developed countries
Most of the economic value created by the Internet falls outside of the technology sector, with 75 percent of the benefits captured by companies in more traditional industries.

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The Internet economy in the world's G20 nations will grow by more than 10 percent annually surpassing the size of the German economy at $4.2 trillion by 2016.
As a proliferation of Web-enabled Smartphone’s is expected to help a total of 3 billion people access the Internet by 2016, online retail, banking, advertising, IT services.
In developed markets, the Internet economy will grow at about 8 percent annually, while in developing markets it will grow more than twice as fast.

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The UK has retained its position as the largest internet economy in the G-20, according to research by the Boston Consulting Group.  The internet is now the UK’s second-biggest economic contributor behind the property sector, having overtaken manufacturing and retail.
By 2016, the Internet economy will be contributing 12.4% of GDP in the UK, compared with a G-20 average of 5.3%.

It has reached a scale and level of impact that no business, industry, or government can ignore. And like any technological phenomenon with its scale and speed, it presents myriad opportunities, which consumers have been quick and enthusiastic to grasp. Businesses, particularly small and medium enterprises (SMEs)—the growth engine of most economies.

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Mobile Economy is Future
The Internet is a vast mosaic of economic activity, ranging from millions of daily online transactions and communications to Smartphone downloads of TV shows.
An extensive study by the McKinsey Global Institute (MGI)—Internet matters:
The Net’s sweeping impact on growth, jobs, and prosperity—includes these findings:
The Internet accounts for 3.4 percent of overall GDP in the 13 nations studied. The Internet economy, now larger than that of Spain, surpasses global industry sectors such as agriculture and energy.
Over the last five years of that period, its contribution to GDP growth in these countries doubled, to 21 percent.

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Kuwait Internet Economy Outperforms EMs
A new report by The Boston Consulting Group (BCG), reveals that Kuwait boasts a globally competitive Internet economy.   The 2015 BCG e-Friction Index highlights that, on a global level, Kuwait is ranked 40th — ahead of a number of strong emerging economies such as Brazil, China, India, South Africa, and Turkey. On a regional level, Kuwaitis ranked fourth after Qatar, the UAE, and Bahrain.
The Mobile Internet Takes off—everywhere
There are currently almost 7 billion mobile phone subscriptions globally, or one for every person on Earth.
 Research firm eMarketer expects that in 2017, seven of the top ten countries for Smartphone penetration will be in Europe (the U.S. will rank 11), and in three European nations (Norway, Demark, and Finland), Smartphone penetration will exceed 90 percent.

Mobile Economy

In Western Europe, demand for such services will drive data traffic up sixfold by 2017, from 187,000 terabytes to 1.1 million terabytes a month, supported by more 4G networks coming online and existing operators increasing their speed, coverage, and capacity.
A Revolution in Behavior
Of Facebook’s 829 million active daily users in June 2014, 654 million (almost 80 percent) were mobile users.
Travelers today use their phones to board planes, unlock hotel rooms, monitor devices at home (temperature settings, for example), and check in via live video with their families. Mobile payments are common in many economies; mobile apps are transforming banking. The lines between traditional retail, e-commerce, and m-commerce have blurred almost to the point of in-distinction in some markets, as consumers research online, offline, and on the go and buy wherever and however they find the best selection, service, and deals.

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Businesses Are Benefiting, Too
There have been more than 200 billion cumulative downloads from the various app stores since 2008. The rate of growth is mind-boggling: more than 100 billion downloads took place in 2013 alone, of which around 20 billion were in the EU.
·         There are more mobile bank accounts in Kenya than in the UK,
·         Banks in Europe are using mobile apps to transform the banking experience for consumers (you can deposit a check by taking a picture)
Mobile commerce in the EU5 reached €23 billion in 2013 (up 76 percent from 2012) and accounts for 13 percent of all e-commerce. Nearly two-thirds of EU5 e-commerce purchases occur on tablets; the analogous figure for the U.S. is about 50 percent.
The Impact of the Mobile Economy
In the EU5, the mobile economy generated about €90 billion ($120 billion) in revenue in 2013, and it is responsible for approximately half a million jobs, of which about half are physically in EU5 countries. In the 13 countries surveyed for this report, the mobile Internet is already generating some €512 billion ($682 billion) in revenues annually—the equivalent of almost €585 ($780) for every adult in the surveyed countries. The mobile Internet economy employs approximately 3 million people in those countries.
Mobile Internet Revenues Are Growing Fast
The revenues generated by the mobile Internet ecosystem are a substantial contributor to global GDP as well—€512 billion ($682 billion) across the 13 countries that account for 70 percent of global GDP. The mobile Internet is driving significant and growing revenues across Europe—€90 billion ($120 billion) in the EU5 in 2013. Put another way, adult Europeans in these countries each spend €555 a year on phones, tablets, data plans, apps, digital content, and m-commerce.
By 2017, EU5 mobile Internet revenues will have more than doubled to about €230 billion ($300 billion)—an annual growth rate of 25 percent, which is comparable to the growth of these revenues in both China and the U.S. The single largest contributor to this growth will be the apps, content, and services component of the ecosystem, driven by the rapid expansion of mobile shopping and advertising. By 2017, we estimate that mobile Internet revenues will have grown to €1.16 trillion ($1.55 trillion) across the 13 countries surveyed an annual increase of 23 percent.
The App Economy Soars
Mobile apps—the software programs that perform designated functions on a mobile device—may be the fastest growth story in recent history. Originally designed primarily to facilitate productivity and information retrieval (mobile calendars and e-mail, for example), mobile apps quickly expanded into numerous other fields, including gaming, navigation, health and fitness, media consumption, communication, and commerce, to name a few.
 App developers have made 1.3 million apps available through both the App Store and Google Play, some 255,000 through the Windows Store, 240,000 through Amazon, and 130,000 through BlackBerry World. In 2013 alone, apps were downloaded 102 billion times globally (of which 9.2 billion downloads were of paid apps), a 60 percent increase over 2012. Downloads are forecast to rise to 269 billion (15 billion paid) by 2017.
Advertising-Supported and “Freemium” Revenue Models
More and more advertiser spending will shift to mobile over time, as consumer usage continues to increase and targeting technology improves. Global mobile advertising revenues will reach $18 billion in 2014, up from $13.1 billion in 2013, and this growth will continue until 2017, when spending will exceed $41 billion.
Building Apps for Others
One area where developers are demonstrating success is building apps for other businesses. Developers are finding new opportunities to connect, monitor, and control IT devices remotely. Some 25 billion new devices (including cars, heating and air-conditioning units, lighting systems, farm equipment, wearable’s, and security systems) will come online from 2015 to 2020, doubling the current number.


A big area of potential growth is machine-to-machine (M2M) communication—networked devices of all kinds, in such industries as automotive, consumer goods, and utilities that exchange information and perform functions without the physical assistance of humans.
An aircraft engine that monitors and reports operating data in-flight is one example; buses and trucks that continually report their location, speed, and other information is another. Research organization IDATE expects the M2M market to reach €40 billion by 2017.

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