Internet economy accounts for 5.9% of country’s GDP

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Internet economy accounts for 5.9% of country’s GDP

The Internet economy, including consumer spending on online retailers and corporate investment in online businesses, accounted for 5.94 percent of Korea’s gross domestic product in 2009, an industry report said yesterday.

The size of Korea’s Internet economy amounted to 63 trillion won ($56 billion) in 2009, according to a recent study by the Korea Internet Corporate Association and the Sogang Research Institute for Market Economy.

The figure, which is part of the 2011 study on the benefits of the Internet economy in Korea, measures revenues of online search engine operators, online advertisement companies, online game developers, online commerce and other businesses relying on high-speed Internet protocol or electronic commerce applications, the association said.

It excludes revenues of hardware manufacturers in the information technology (IT) sector. The study measured expenditures, rather than production, of consumers, corporations and the government on online activities, such as purchasing books on the Web, online access and Internet devices.

The study showed that the Internet economy is one of the key drivers to the country’s economy, the organization said.

The Internet economy was a bigger contributor to Korea’s GDP than electronics and electrical machinery manufacturing sector, which accounted for 5.71 percent of the GDP in the same year. Its contribution was also higher than the country’s auto industry, which produced 4.23 percent of Korea’s 2009 GDP, it said.

Korea is one of the most wired countries in the world with more than nine in every 10 households having access to high-speed broadband Internet. The study also argued that the contribution of the Internet economy to Korea’s economic growth over the last five years stood at 6 percent, lower than a recent estimate by a global consulting firm, because of regulations.


Yonhap

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