Impact of Internet for Economic Value and Social Value

“Economic Value of the Advertising-Supported Internet Ecosystem” is a very detailed report that is too long for me to read, especially in the electronic format, so that it almost cost me a day to read through it. After reading this report, I was astonished by how great impact the internet has to the ecosystem of business. This is a report very deeply analyzed the economic even social changes that were brought by internet. Also, the study provides some insights for the future trend of internet. There are huge amounts of data in this report which is gathered from U.S. Securities and Exchange Commission (SEC). Those data is so comprehensive to include all industries and businesses related to the internet.

Internet is a very profound science, which is supported by many elements. In order to connect to the internet, hardware such as servers, routers, broadband and computer is essential. Apart from the hardware, software also plays an important role. Moreover, the purpose of internet should be seriously considered; otherwise, no one will use the internet. I am very impressed by the CREC (Center for Research in Electronic Commerce) Model of the Internet Ecosystem. The whole study is organized throughout the four layers in that model – internet infrastructure layer, internet applications layer, internet intermediary layer, and internet commerce layer. The authors collected hundreds of data to dig inside those four layers. From my understanding, infrastructure here refers to the hardware while the application is all about the software. Similarly, intermediary means consumer support, and commerce here is close to the consumer services.

During reading the study, there are two things that were out of my expectations. The first thing is that although each layer of internet ecosystem creates thousands of jobs and generates millions of revenues, it still benefits people more from the minor layers below those four layers. The companies grew fastest is not the ones like Facebook or Twitter, but the ones that support for those famous firms. This finding is beyond my imagination, because all I can think of is that the internet must drive the usage of the high-profile brands, however, I have not concerned those behind the leading companies.

Another thing about internet that surprised me from the data that provided by this report is that the number of employment for infrastructure is far more than the application in 2011, which is totally opposite to the situation in 2007. As the report suggested in chapter 4, the estimation of the employment is conservative, and a large part of them are part-time workers, or even under-employed. There are few large companies like Microsoft and Symantec Corporation. Compared with application, because there are more branches under infrastructure, companies involved in different fields in hardware (including internet access, cable providers, and mobile networks, etc.) appear to be a lot more than the software companies. Hence, the number of employment is increasing dramatically recent years.

Through the facts and data in this study, it is not hard to see that internet is a so powerful technology that creates thousands of jobs and huge amount of revenues. There are so many benefits for using internet – i) the cost is low, ii) it is easy to do the business with people around the world, iii) it enhances creativity and entrepreneurship, iv) it is a perfect way for social activity, v) it drives the usage of mobile and tablets. The most important part is, while internet increases the economic value of business, it also stimulates the social value for people. Meanwhile, social value again drives the economic value. I believe the future of internet ecosystem will not be only limited on computer, tablets, or mobile phones – I even heard about the “internet of things”.

 

Reference: John Deighton & Leora D. Kornfeld, Economic Value of the Advertising-Supported Internet Ecosystem

http://www.iab.net/media/file/iab_Report_September-24-2012_4clr_v1.pdf