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WASHINGTON, Sept 26 — The rapidly growing internet sector accounted for US$2.1 trillion (RM8.8 trillion) of the US economy in 2018, or about 10 per cent of the nation's gross domestic product (GDP), an industry group said yesterday.
The Internet Association, a group representing Amazon.com Inc, Facebook Inc, Alphabet Inc, Twitter Inc, Uber Technology Inc and many other firms, released its estimate as the tech sector has come under increasing criticism, with some lawmakers calling for the breakup of major firms and renewed antitrust scrutiny.
The study says the internet sector represents the fourth largest sector of the US economy, behind real estate, government and manufacturing.
Last year, manufacturing accounted for about US$2.3 trillion in US GDP.
The study found that the internet sector has nearly six million direct jobs, which accounts for 4 per cent of US jobs, while U.S. internet firms spent US$64 billion in capital expenditures. The study also found the internet sector indirectly supports another 13 million jobs.
In 2015, the Internet Association estimated the sector was responsible for an estimated US$966.2 billion, or 6 per cent GDP in 2014.
The US Bureau of Economic Analysis (BEA) in April estimated the “digital economy” accounted for 6.9 per cent of the 2017 US GDP, or US$1.35 trillion, in 2017, placing it in seventh place overall. That definition includes digital-enabling infrastructure, e-commerce transactions, and digital media but does not include ride-sharing services and other goods and services connected to the “sharing” economy.
The Internet Association study used Census, BEA, and SEC government data from 2018 to estimate the internet sector's contributions to the American economy. The group's chief economist, Christopher Hooton said the internet industry is “creating jobs in every sector of the economy” and said the new analysis more accurately captures the internet's economic impact.
The BEA study notes that employees working in the US digital economy earned US$132,223 in average compensation in 2017, compared to US$68,506 per worker for the total US economy. — Reuters