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May 30, 2011

Internet creates 2.4 jobs for every job it destroys: McKinsey

The Internet, which has transformed the way we live, work, shop, socialise and now, is also emerging as a powerful catalyst for job creation, says a survey by global management consultancy McKinsey.

According to a report by McKinsey Global Institute, the Net has a sweeping impact on growth, prosperity and has "created 2.4 jobs for every job that it has destroyed".

"The Internet is a contributer to net job creation," McKinsey Global Institute said in its report, titled, ''Internet matters: The Net''s Sweeping Impact on Growth, Jobs and Prosperity''.

"While jobs have been destroyed by the emergence of Internet, many more have been created during the same period, including jobs directly linked to the Internet, such as software engineers and online marketers as well as more traditional jobs -- logistics to deliver online purchases," it added.

McKinsey further noted that notwithstanding the fact that some jobs have been destroyed by the emergence of the Internet, a detailed analysis of the French economy showed that while the Internet has destroyed 500,000 jobs over the past 15 years, it has created 1.2 million other jobs.

"A net addition of 700,000 jobs, or 2.4 jobs created for every job destroyed...," it said.
This result was also reflected in another McKinsey survey of more than 4,800 SMEs, which showed that 2.6 jobs were created for every one destroyed, confirming the Internet''s capacity to create jobs across all sectors.

McKinsey examined the impact of the Internet on 13 countries -- the members of the G8, Brazil, China, India, South Korea and Sweden.

In the 13 countries that the survey covered, the Internet contributed an average 3.4 per cent to the GDP, more than agriculture, energy and other better established industries.Meanwhile, the United Nations, in its millennium development goals, lists Internet penetration as a key metric in efforts to reduce poverty and encourage rational development.Around two billion people are now connected to the Internet and the number is growing by 200 million each year.

India and China are strengthening their position in the global Internet ecosystem rapidly and are showing growth rates of more than 20 per cent in terms of new connections.

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