August, 2011 | Blog | Blue Hive 1

August, 2011



Digital matters: the Internet’s sweeping impact in world affairs

The impact of digital communication in world affairs has been profound; increasing connections between people and the way they live, especially at the intersection of cultures and commerce. And with around two billion people now engaging with digital media (on everything from PCs to tablets, laptops to phones, TVs, radios and cinema screens), creative agencies need to understand the social, economic, and technological dimensions of the Net’s impact as they develop and target their campaigns. They also need to know how best to deliver these campaigns, globally, across an ever growing and continuously evolving range of media.

Driving growth, online

According to a recent report by the McKinsey Global Institute, the global activity of Internet users accounts for 3.4% of GDP growth in the 13 strongest economic countries around. Almost $8 trillion exchanges hands each year through e-commerce. The Internet drove 21% of GDP growth in the last 5 years in economically mature countries. These are all phenomenal statistics indicating the importance of digital to boost growth in an anxious economic age. In some developed markets, about two-thirds of all businesses have a web presence of some kind, and one third of small/medium size businesses (SMEs) make extensive use of web technologies to drive productivity, market engagement, and prosperity.

The Internet has also transformed the way we organise society and the ways our countries develop and grow. In two decades, the Internet has changed from being a relatively small network resource for researchers and ‘geeks’ to an essential part of daily life for billions. And according to McKinsey, it seems that the Internet is lowering unemployment too, creating 2.6 jobs for every 1 job lost.

The power of invention

Many have compared the creation of the Internet to another communications game changer, the introduction of the Gutenberg press five centuries earlier. But a comparison with the development and commercialisation of electric power may be more appropriate (N. Carr, The big switch: rewiring the world, from Edison to Google, 2009). Among its many other consequences, electricity changed the landscape of cities around the world, allowing elevators that can travel great heights and heralding the dawn of massive skyscrapers. As with electricity, the Internet has transformed the global landscape. The Internet bridges vast distances and has made the world “flatter” (T. Friedman, Hot, Crowded, & Flat, 2008) by allowing instant access to an almost endless stream of information that can be immediately brought into play. Its impact on economic wealth reaches well beyond pure players in the industry. Indeed the brunt of economic contributions derive from established industries that, in the shadow of the Internet, have become more productive, created more jobs, increased standards of living, and contributed to real growth.

As with electricity, the Internet changed every corner of the world, it’s not limited to those countries instrumental in its initial development. As Internet usage spreads to even the most remote communities—where gas-powered generators and satellite links make connection possible—its positive effects grow. No wonder the United Nations Development Goals lists Internet penetration as a key metric in efforts to reduce poverty and encourage rational development.

A change for good

Digital media touches and influences all of us: businesses, individuals, governments, and entrepreneurs. It has made possible new waves of business models and entrepreneurship but has also led to radical innovations for accessing, using, and delivering goods and services. It has transformed industries and governments through innovative approaches. And it’s changed how users think about the way the countries in which they live are governed (as the recent unrest in North Africa and the Middle East demonstrates). Ultimately, the digital industry matters because it fuels economic growth, transforms global politics, and connects people in new and profound ways.

The Net is huge, it’s continually evolving and developing, and it’s changing the world we live in. But knowing why and how these changes matter is key, because it means we can deliver greater innovation, fresher thinking and, ultimately, help our clients benefit from these macro-economic shifts too.

By Deaglan Mac Farland, August 2011.

The sources for the statistics are:

  • The World Bank, 2009; Gartner, 2010; Eurostat, 2010; McKinsey & Company, 2011.
  • Nicholas Carr, The big switch: Rewiring the world, from Edison to Google, New York: W.W. Norton & Company, 2009.
  • Thomas Friedman, Hot, Crowded, & Flat, Farrar, Straus & Giroux, 2008.