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Thoughts On The Internet Economy Sessions At IGF 2015

Reflecting on the 2015 IGF last week, the Internet Economy sub-theme featured prominently, for good reason.  First of all, the Internet economy is a large sector in itself, accounting directly for over 5% of GDP in the G20 countries alone.  More broadly, however, the Internet is what economists call a general purpose technology, which, as the name suggests, has economic impacts on almost every other sector.

As an example of the broader impact of the Internet, today one could argue that the largest taxi company in the world is Uber, which owns no taxis and employees no drivers. Uber is now valued at over $50 billion, in just over five years of operation, and has over 160,000 drivers in US alone, who can earn a full-time living or supplement other work flexibly.  At the same time, Uber has disrupted the traditional taxi industry, and led to protests, bans, and economic anxiety for traditional taxi drivers. As such, Uber encapsulates the opportunity of the Internet, an innovative use of the mobile Internet and smartphone technology (as detailed in our recent Global Internet Report 2015), and the broader economic impact of the Internet.

There were 15 workshops in the Internet economy sub-theme, covering the themes highlighted by the Uber example:

  • First, the economic opportunity of the Internet for innovators and workers is one reason that the digital divide is so critical;
  • Second, the innovative uses of the Internet that continue to astound; and
  • Third, the broader economic impact.

A number of workshops covered the economics of the digital divide, focusing on how to pay for the infrastructure, the efficiency of interconnecting through IXPs, and generating the local content needed to make the Internet as relevant and attractive in emerging markets as it is in established markets.  A second group of workshops covered the usage of the Internet, including content copyright and intermediate liability, the importance of trust in promoting usage, and broadening the use of mobile payments.  Finally, a third group of workshops covered broader economic issues, including the impact of the Internet on jobs, the taxation of multinational Internet companies, and digital trade issues.

It was my privilege to participate in some of these workshops, and attend as many others as I could. As an economist, I was glad to see the depth and breadth of this sub-theme, as we all increasingly work to increase the breadth of Internet access and depth of usage, while addressing the broader economic impacts that emerge.