The 4.2 Trillion Dollar Gravy Train
The Boston Consulting Group (BCG), one of the world’s leading research organisations, has published some startling figures about business on the Internet. If the Internet were an economy, its business would be the fifth largest economy in the world, behind only the United States, China, India and Japan. It is no less startling in the UK, where Internet business is already the fifth largest economic sector, already ahead of healthcare, construction and education. But BCG makes clear that this is just the beginning. The UK web economy is growing at 10.9%; well ahead of the 8.1% average for other G20 economies. In 2010, more than 12.5% of all UK retail trade was conducted on the Internet. By 2016 this is expected to grow to 23%.
The report concludes that “no one – individual, business, or government – can afford to ignore the ability of the Internet to deliver more value and wealth to more consumers and citizens more broadly than any economic development since the Industrial Revolution.” The report also says that “Businesses, particularly small and medium enterprises (SMEs) – the growth engine of most economies – have been uneven in their uptake, but they are moving online in increasing numbers and with an increasingly intense commitment.”
In short, UK SMEs need to get on the train or get left on the platform; take part in this Internet-led revolution, or get left behind by those who do. But it’s not easy for SMEs. Firstly they need a sophisticated IT infrastructure to support an online business and then they need deep technical expertise to maintain peak performance and maximum uptime. Not all SMEs have this expertise, but while short periods of downtime are tolerated by staff, they are not tolerated by online customers.
Back to the figures: the Internet contributed £121 billion to the UK economy in 2010 (or 8.3% of GDP). By 2016 it will be £225 billion and 12.4% of GDP. The Daily Telegraph comments: “Companies that use the Internet for ‘marketing, sales and interactions with customers and suppliers’ grew three times faster than conventional firms… Their revenues grew by 12 per cent over the past three years, compared to only 4 per cent for those who made low or no use of the Internet.” If you’re serious about business, you have to be seriously online.
“Around the world, SMEs that embrace the Internet are growing faster and adding more jobs than those that don’t. By encouraging businesses to turn to the Internet, countries can improve their competitiveness and growth prospects,” said Paul Zwillenberg, a BCG partner and coauthor of the report. If you’re not sure how to ensure a good seat on the Internet train, call us. We’ll show you how to make the most of this Internet revolution.
BIS has special offers for fast Internet services, whether you want to increase your existing Internet bandwidth or provision new resilient links, BIS can provision new services rapidly; we’re often able to increase Internet bandwidth within 24 hours.
Written by: Samantha Keating