The Internet today connects more than two billion people worldwide. The Internet already has immense
impact on the global economy, contributing an estimated $1.7 trillion, or just under 3 percent, of global GDP
in 2010. Yet half the number of Internet users lives outside the advanced economies, often in countries that
are quickly developing, have significant economic potential and are socially and culturally diverse. India has
about 120 million people online today and offers a striking example of the Internet’s growth potential. India
is adopting the Internet at a much more rapid pace than advanced economies and even many developing
economies, yet 90 percent of its population is currently not connected.
This report assesses the impact of the Internet on India’s economy, estimating its impact on GDP. Looking
beyond that, we measure the Internet’s broader impact in terms of consumer surplus and the development
of Internet ecosystems. We also look at the ways in which various participants have benefited from the
Internet already. We measure India’s environment for e‑commerce and entrepreneurship, and we analyze
in detail the impact of the Internet on its small and medium‑sized enterprises (SMEs). Finally, we assess the potential for the future impact of the Internet and what it would take for India to bring this potential into being. As a basis for comparison, we use a set of 57 countries, both developed and developing, that include the G‑20, many middle‑income developing nations, and some populous but less‑developed nations; these collectively constitute 91 percent of world GDP. Thirty of these countries are what we call “aspiring countries,” defined as having the scale and dynamism to fuel economic performance in the global economy while driving significant domestic growth and offering prosperity to their own citizens. These aspiring countries have a collective GDP of $19 trillion, or 30 percent of global GDP. We focus our comparisons with India more closely on an illustrative subset of seven of the aspiring countries: Argentina, Brazil, China, Malaysia, the Philippines, South Africa and Vietnam. Of the set of more than 20 developed countries in our database, we focus our comparisons on five: Germany, South Korea, Sweden, the United Kingdom, and the United States. Our report offers seven key findings concerning the impact of and outlook for the Internet in India.
SEE THE LINK:
http://www.mckinsey.com/locations/india/mckinseyonindia/pdf/Online_and_Upcoming_The_internet%27s_impact_on_India.pdf