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e-commerce-guide.com/news/trends/article.php/135521
By June 10, 1999 William Shatner predicted it was going to be big...really big. Now comes the confirmation. The results of a new study, out today, reveal that revenue generated by Internet businesses is larger than all previous estimates: Internet businesses contributed a staggering $300 billion in U.S. revenue and 1.2 million jobs in 1998. The study was published by the University of Texas' Graduate School of Business and the Center for Research in Electronic Commerce, in conjunction with Cisco Systems, Inc. in two reports, "The Internet Economy Revenues Indicator" and "The Internet Economy Jobs Indicator." The reports, which surveyed 3,000 companies, will be updated every three months at the InternetIndicators site. The research was limited to companies with revenues directly from the Internet and does not include companies generating products or services from the Internet companies (i.e. professional services or utilities). Data was compiled using research reports from research companies, 10-K reports, product literature and Web sites for the top 10 percent of the largest companies. Internet e-commerce is mushrooming at a rate much faster than previously expected the report said, finding that in 1998 total e-commerce exceeded $102 billion for U.S. based-companies. Sampling from the database pointed to major online activity in business sectors that have been under-reported in previous studies. For example, researchers found that online grocery sales generate a significant volume of business, although they do not make the top-100 Internet sales list, with the exception of Peapod. Other key stats from the report include: companies with significant Internet revenues have a combined market value of over $2.4 trillion; Internet workers are 65 percent more productive than non-Internet workers; the average revenue per Internet employee is $250,000 vs. $160,000 per non-Internet business employee. "The Internet Economy continues to create unprecedented growth opportunities for people, companies and countries on a global basis," said John Chambers, president and CEO of Cisco Systems. "For the first time, this study measures real jobs and economic growth directly tied to the emerging Internet Economy." "When you consider the economic ripple effect that these jobs and economic growth drive worldwide, I believe the actual Internet Economy will usher in an Internet Century of profound and long-lasting change for business and people," Chamber predicted. The Internet economy indicators were generated by measuring Internet related revenue and job growth in four layers of the Internet Economy:
Source: The University of Texas at Austin Based on these findings, the rise of the Internet economy will occur in tandem with a new business model, the Internet Ecosystem, according to Don Listwin, executive vice president, Cisco. Net-related companies should use this business model as a competitive advantage in order to better serve their Web-connected customers, extend market reach and manage operations, Listwin said. "Companies that embrace the Internet Ecosystem business model will thrive in today's Internet-centric world," said Listwin. "This new business model leverages hundreds of billions of dollars in Internet infrastructure, an asset available to any company in the Internet Economy." Listwin has also come up with the Internet Quotient (IQ), a qualitative measurement of a company's potential to be successful in the Internet economy. For more information about Cisco's Internet Ecosystem business model, click on the site links above. |
