Internet Economy Looking Good

A study conducted by the University of Texas and released by Cisco Systems found that the Internet economy generated more than $300 billion in the US in 1998 and was responsible for 1.2 million jobs.

According to the study, the US Internet economy grew at an estimated compound annual growth rate of 174.5 percent from 1995 to 1998, compared to the overall worldwide average economic growth rate of 3.8 percent. In only five years, the Internet economy already rivals industries such as energy ($233 billion), automobiles ($350 billion), and telecommunications ($270 billion) in size, according to researchers. The US Internet Economy is one of the top 20 economies in the world, the study found.

The study also found that Internet commerce is growing at a much faster rate then expected; that Internet workers are 65 percent more productive than non-Internet workers; and that companies with significant Internet revenues have a combines market value of more than $2.4 trillion.

According to the study, total e-commerce in 1998 exceeded $102 billion for US-based companies and the average revenue per Internet employee is $250,000 compared to $160,000 per non-Internet business employee.

“The Internet economy continues to create unprecedented growth opportunities for people, companies, and countries on a global basis,” said John Chambers, president and CEO of Cisco Systems. “For the first time, this study measures real jobs and economic growth directly tied to the emerging Internet economy. When you consider the economic ripple effect that these jobs and economic growth drive worldwide, I believe the actual Internet economy will usher in an Internet century of profound and long-lasting change for business and people.”

The study was compiled by interviewing more than 3,000 US-based companies that generated all or part of their revenues from Internet products and services. The Internet Economy Indicators were derived from measuring Internet-related revenue and job growth in four layers of the Internet economy: Internet infrastructure; Internet and network appliance applications infrastructure; Internet intermediaries; and Internet commerce.

The findings of the study will be updated every three months and are available at http://www.internetindicators.com.

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