IAB research shows that the Internet economy is transforming the US economy, creating new markets and driving job growth for companies 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 overall U.S. economy over the past four years, and now accounts for 12 percent of the US gross domestic product (GDP).
The Internet economy’s contribution to US GDP has grown at 22 percent per year since 2016, in a national economy growing at two to three percent per year. In 2020 alone, it contributed $2.45 trillion to the $21.18 trillion GDP of the United States. Since 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 the Market-Making Internet – Advertising, Content, Commerce, and Innovation: Contribution to US Employment and GDP,” also found that:
- More than 17 million jobs in the US were generated by the commercial internet, 7 million more than four years ago.
- More Internet jobs, 38 percent, were created by small businesses and the self-employed 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 less than the combined memberships of crafts and unions SAG-AFTRA (160,000), the American Federation of Musicians (80,000), the Writer’s Guild (24,000), and the Authors Guild (9,000).
- Every congressional district relies on internet-dependent jobs:
- In seven congressional districts, at least 10% of their residents work directly in the Internet ecosystem, accounting for 9% of total Internet employment in the US.
- The remaining 91% of internet employment is spread across 425 congressional districts.
- Of these, 272 districts have at least 10,000 internet-dependent jobs.
“In the eight years since our last two surveys, the Internet has made company formation a much more democratic process,” said John Deighton, the Harold M. Brierley Professor of Business Administration Emeritus, Harvard Business School. “Not only large companies, but also large numbers of small businesses and individuals now have the platforms and tools to find, connect with and transact with customers. And founders don’t have to put large amounts of capital on the table. Investors have shown a strong willingness to provide the capital, confident that advertising, subscription and licensing sales and freemium options will provide them with an attractive return on 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, IAB’s Chief Executive Officer. “Not only are 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 company located anywhere in the US to reach a global market. As regulators continue to explore online and digital data policies, they need to understand how the Internet is driving economic growth and how proposed regulations could slow or even halt that growth.”
The 17.6 million direct and indirect jobs generated by the Internet indicate a dramatic increase compared to just three million jobs when ILO began measuring employment growth in 2008. In particular, the survey estimated that 850,000 people are self-employed and 450,000 small business jobs in jobs that could not exist without the Internet. The study also found that the commercial Internet directly provided seven million jobs and indirectly provided jobs for an additional 10.65 million people meeting the service needs of Internet companies.
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, 11am to 12pm ET for a virtual presentation of highlights from the study “The Economic Impact of the Market-Making Internet” by Dr. John Deighton and the view of our IAB experts, followed by a panel discussion on “Harnessing the Power of Digital for Growth & Innovation” with three company founders sharing their stories and insights. Read more about the webinar and register here.
The Interactive Advertising Bureau (IAB) empowers the media and marketing industry to thrive in the digital economy. Its membership includes more than 650 leading media companies, brands and the technology companies responsible for selling, delivering and optimizing digital ad marketing campaigns. The trading group critically researches interactive advertising, while also educating brands, agencies and the wider business community about the importance of digital marketing. In collaboration with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and increasing the knowledge, skills, expertise and diversity of the workforce across the industry. Through the work of its public policy agency in Washington, DC, the industry association advocates for its members and promotes the value of the interactive advertising industry to lawmakers and policymakers. Founded in 1996, IAB is headquartered in New York City.
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