Internet economy

Definition

The Internet economy (also called the .com economy or dot-com economy) refers to business conducted through markets whose infrastructure is based on the Internet and World Wide Web.

Overview

An Internet economy differs from a traditional economy in a number of ways, including: communication, market segmentation, distribution costs, and price.

The impact of the Internet economy

The Internet is making economic activity more efficient, faster, and cheaper, and extending social interaction in unparalleled ways. Increasingly, the largest productivity gains for businesses come from using online networks in some form.

The Internet has also brought unprecedented user and consumer empowerment as well as opportunities for new innovative and social activities. Individuals have greater access to information, which facilitates comparisons and creates downward pressure on prices. Internet users are extremely active, creating new content themselves and interacting in new ways.

The Internet is quickly permeating all economic and social domains, and most public policy areas. For instance, e-government has become the prime tool for supporting government functions and interaction with citizens and businesses. Healthcare systems are increasingly making use of the Internet and online networks to increase affordability, quality and efficiency, through electronic patient record systems, remote patient monitoring and healthcare delivery, along with improved diagnostics and imaging technologies. Educational performance is found to be correlated with home access to, and use of, computers. Moreover, environmentally-friendly technologies based on the Internet in buildings and transport systems and alternative power generating systems can help address climate change and improve energy efficiency.

The influence of the Internet is inherently global; helping to forge closer integration of our economies and societies. Moreover, as the Internet expands even further it can help the economic and social development of people of all countries.

Source

• OECD, The Future of the Internet Economy (June 2008).

See also

• Cyber economy