The Internet economy of the G-20 nations will reach $4.2 trillion by 2016 almost 1.7 times last year’s estimated level, as more than two-thirds of Americans would forgo coffee and 21 percent give up sex for a year to stay online, Boston Consulting Group said.
U.S. consumers said they would need to receive about $2,500 to stay offline for that period, according to a BCG survey released today. Consumers in most countries would require three percent to six percent of their average annual income to follow suit, the study found. All said they valued search, e-mail, online banking and investing functions. BCG interviewed about 1,000 users in each country.
The study shows the importance of the Web to consumers and to businesses trying to reach them through sites, including social-networking company Facebook Inc. (FB) and online-search provider Google Inc. (GOOG) There’s an “explosion” of people buying online, said David Dean, a senior partner at the Boston-based management consulting firm.
“The Internet has become like electricity or water,” said Dominic Field, a partner at BCG in Los Angeles, who along with Dean was one of the authors of the study.
By 2016, the number of global Web users will reach 3 billion from an estimated 1.9 billion in 2010, BCG said. Across the G-20 nations, the Internet economy accounted for an estimated $2.5 trillion in 2011, BCG said.
Were it a country, the Internet economy would be in the top five, behind the U.S., China, Japan and India and ahead of Germany, the study found. In the U.S., the Web’s contribution to 2010 gross domestic product exceeded the federal government’s, according to BCG.
Mobile access will become more important with smartphones and tablets accounting for four out of five broadband connections by 2016, the study showed.
Google, based in Mountain View, California, and Apple Inc. (AAPL) dominated the U.S. smartphone sector in the three months ended January with 78.1 percent of devices carrying their software, ComScore Inc. (SCOR) said March 6. Apple software was found on 29.5 percent of smartphones, while Google had 48.6 percent share.
While the U.S. will still make the largest contribution to Internet-related spending, its leadership is slipping, Field said. The country will account for 25 percent of the total Internet economy in 2016, down from about a third today, he said. The U.S.’s Internet economy is growing slower than that of the U.K., for example.
“One big driver is infrastructure, and the U.S. has historically lagged in smartphone use and broadband speeds in rural areas,” Field said. Some developing countries, such as India, are seeing their Internet economies growing at double the rate of the U.S., he said.
Younger and older users value the Internet the most, the study found.
“For the older generation, the Internet is still relatively new,” Dean said. “As the older consumers understand what is possible, they see high value in the Internet. For younger consumers, the Web has become like air, they take it for granted.” View the original article here