The IAB study shows that the Internet economy is transforming the US economy, creating new markets and spurring job growth for businesses large and small.
New York — October 19, 2021 – A new study commissioned by the Interactive Advertising Bureau (IAB) and led by a Harvard Business School researcher found that the Internet economy grew seven times faster than the total US economy over the past few years. four years, and now represents 12 percent of the gross domestic product (GDP) of the United States.
Specifically, the Internet economy’s contribution to US GDP grew 22 percent annually since 2016, in a national economy growing between two and three percent per year. In 2020 alone, it contributed $2.45 trillion to the US$21.18 trillion GDP. Since the IAB began measuring the economic impact of the Internet in 2008, the Internet’s contribution to GDP has increased eightfold, from $300 billion to $2.45 trillion.
The study, “The Economic Impact of Internet Market Making: Advertising, Content, Commerce, and Innovation: Contribution to US Employment and GDP,” also found that:
- The commercial Internet created more than 17 million jobs in the US, 7 million more than four years ago.
- More Internet jobs, 38 percent, were created by small businesses and self-employed individuals than by the largest Internet companies, which generated 34 percent.
- There are 200,000 full-time equivalent jobs in the online creator economy. This number is just below the combined craft and labor union memberships SAG-AFTRA (160,000), the American Federation of Musicians (80,000), the Writers Guild (24,000), and the Authors Guild (9,000).
- Every congressional district relies on jobs that depend on the Internet:
- Seven congressional districts have at least 10% of their residents working directly in the Internet ecosystem, representing 9% of total US Internet employment.
- The remaining 91% of employment on the Internet is distributed in 425 electoral districts.
- Of these, 272 districts have at least 10,000 Internet-dependent jobs.
“Over the eight years since our last two studies, the Internet has made starting a business a much more democratic process,” said John Deighton, Harold M. Brierley professor of business administration emeritus at Harvard Business School. “Not only large companies, but also a large number of small businesses and individuals now have the platforms and tools to find, engage with, and transact with customers. And founders don’t need to bring large amounts of capital to the table. Investors have shown a great willingness to put up the capital, confident that advertising, subscription and license sales, and freemium options will provide them with an attractive return on their investment.”
“It is clear that the US economy is undergoing a radical transformation driven by the market-making power of the Internet,” said David Cohen, CEO of the IAB. “Not only are the barriers to entry lower, but the power of interactive advertising allows businesses to connect with consumers faster and more efficiently than ever before. It is now possible for a business located anywhere in the US to reach a global market. As regulators continue to scrutinize online and digital data policies, they need to understand how the Internet drives economic growth and how proposed regulations could slow or even stop that growth.”
The 17.6 million direct and indirect jobs generated by the Internet mark a dramatic increase from just three million jobs when the IAB began measuring job growth in 2008. Specifically, the research estimated that 850,000 people are self-employed. own and 450,000 work for small businesses in jobs. that could not exist without the internet. The study also showed that the commercial Internet directly generated seven million jobs and indirectly provided jobs for an additional 10.65 million people who met the service needs created by Internet-based businesses.
The study is the fourth in a series of reports measuring the economic value of the commercial internet, published every four years since 2008.
For more information and the full report, visit here.
Join us tomorrow Wednesday, October 20, from 11:00 a.m. to 12:00 p.m. ET for a virtual presentation of highlights from “The Economic Impact of Internet Market Creation” study by Dr. John Deighton and insights from our IAB experts, followed by a panel discussion on “Leveraging the power of digital for growth and innovation” with three business founders sharing their stories and insights. Learn more about the webinar and register here.
The Interactive Advertising Bureau (IAB) empowers the media and marketing industries to thrive in the digital economy. Its membership is made up of more than 650 leading media companies, brands and technology companies responsible for selling, delivering and optimizing digital ad marketing campaigns. The trade group conducts critical research on interactive advertising, while also educating brands, agencies and the broader business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, the IAB develops standards and technical solutions. IAB is committed to professional development and elevating the knowledge, skills, experience and diversity of the workforce throughout the industry. Through the work of its public policy office in Washington, DC, the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and legislators. Founded in 1996, IAB is headquartered in New York City.
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