That is the verdict from the Boston Consulting Group (BCG) in a newly released report.  Central to this rapid growth of the web economy will be the shift towards ubiquitous and mobile web access, the massive increase of internet users in emerging G20 nations (from 238 million in 2005 to 1.39 billion in 2015) and an explosion of global IP traffic and data (30 exabytes per year in 2005 to 966 exabytes in 2015).

Some of the other main findings:

• Online purchases will account for more than 20 percent of retailing in the UK and between 8 and 12 percent in other leading economies by 2016
• In the UK, the sales of high- and medium- web businesses grew by 4.1 percent annually from 2007 through 2010 – about seven times faster than that the overall sales of low- and no-web businesses
• By 2016, there will be 3 billion Internet users globally, and the value of the Internet economy in the G20 will rise from £1.5trillion to £2.7trillion by 2016
• By 2016, China will have nearly 800 million Internet users, about the same number as France, Germany, India, Japan, the UK and the US combined

The good news for the UK, according to the BCG e-Intensity index, is that it is one of the ‘natives’ meaning that it is ahead of the pack in terms of its ability to harness the internet to drive growth.  The BCG e-Intensity index looks at 50 nations and their respective levels of enablement (the amount of Internet infrastructure in place), expenditure (the amount spent on online retail and advertising) and engagement (the level of involvement ofbusinesses, governments, and consumers with the internet).  Other leading economies such as the US, Germany and France were all identified as ‘players’ rather than ‘natives’ and did not score as highly as the UK on the index.

What does all this mean?

For businesses, the internet will undoubtedly become more of a disruptive force, but also more of an opportunity for growth in the years ahead.  As the report makes clear “the traditional way of looking at strategy – in terms of 3 to 5 year planning cycles – is out of date” and those that who do not improve their “digital balance sheets” will increasingly find it difficult to compete.  The report also stresses the important role that policymakers need to play.  This includes promoting infrastructure investment, putting a priority on skills building and also encouraging entrepreneurial activity.  As ever it will be the combination of a web savvy private sector, alongside governments creating coherent policy frameworks which will enable nations set themselves apart from the rest.

For the UK, this report is a positive read.  UK retailers have clearly been successful in marketing their products on the web and consumers have a strong appetite for online shopping.  Ensuring the UK remains ahead of the game will however hinge upon a number of factors such as encouraging more businesses to go online, supporting UK businesses to exploit new and emerging markets and by having the best possible digital infrastructure in place right across the country. The UK’s prominence is not a given.

Technorati Tags: boston consulting group, web economy

Tags: boston consulting group, web economy

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