McKinsey: The web is a job creator, not killer

Predicts 2.6 new jobs created for every one lost.

Consulting group McKinsey has released a study that attempts to dispel the notion that internet services have an adverse impact on employment levels.

McKinsey's Global Institute report was produced for release at the “e-G8” summit in Paris, where internet big wigs met with political leaders to discuss the future of the web on Wednesday.

According to a McKinsey, the internet today accounts for 3.4 percent of gross domestic product (GDP) across G8 member countries, but will account for 21 percent in five years. 

The study looked at 13 countries that account for 70 percent of global GDP, consisting of G8 nations, as well as South Korea and Sweden due to their high internet penetration, and Brazil, China and India for their sheer size. 

The study concluded that the internet has “created jobs on a large scale” and that this trend will likely accelerate. 

The web has historically been viewed by many as destructive to the workforce. It was estimated that in France alone, 500,000 lost their jobs to online services over the past 15 years.

But this was only short-term, the study noted. The report said the idea that “disintermediation” -- where new technology replaces middle men in a supply chain -- destroyed jobs was a fallacy.

Over the same period that 500,000 lost their jobs in France, the web enabled the creation of 1.2 million new jobs, McKinsey said.

The report noted that developing nations have the most to gain. Online services accounted for six percent of GDP in Sweden and the UK, but only four per ent of nine other nations it analysed.     

It also offered small and medium businesses an edge. Of the 4,800 SMEs surveyed, those that relied heavily on web technologies grew twice as fast as those that did not. 

McKinsey put the economic “surplus” or value to each consumer in the UK and Germany at US$18 and US$20 per month.  

The key ingredients to build a strong internet ecosystem required nations to promote human capital, supported by universities, corporate research and development centres.   

Other ingredients include easy access to financial capital, internet infrastructure, and the business environment shaped by regulations and rights protections.

Telstra was the only Australian organisation to make McKinsey's top 250 list of influential companies on the web.