The Internet economy will by 2002 employ more than 10 million people across a variety of industries in the United States and Europe, according to a study released Monday by Chicago, Illinois-based Andersen Consulting.
The report, “Internet Enabled Job Creation and the Digital Revolution,” concluded that even though some individuals in traditional industries are being displaced by automation and the Internet, the number of new jobs created more than compensates for the losses.
“The good news is that the Internet is creating more jobs than it is destroying, even when you look at traditional business models,” said Steve Freeman, a partner with Andersen Consulting.
Freeman added, “This peripheral job creation is likely to be significant in the short term as established businesses invest in building up new Internet operations alongside their existing businesses.”
Digital and Traditional Jobs
By 2002, the Internet will have directly created 5.8 million jobs in the United States and 3 million in the six European countries studied — France, Germany, Ireland, Italy, Spain and the United Kingdom. These jobs include those created by Internet pure-play companies, portals, software consultants, Web designers, and telecommunications and Internet Service Providers (ISPs) offering Internet access.
When jobs in related industries are counted, the total number of jobs created in the U.S. and in the studied European countries jumps from 8.8 million to more than 10 million.
The survey found that the Internet is creating both traditional and digital jobs because the Net allows companies a wider geographic reach. In addition, the Internet has led to the development of new marketing channels, expanded customer service capabilities, and the creation of broader product and services lines. All of those functions add new jobs to the marketplace.
Europe Narrows Gap
While the U.S. has been home to more Internet activity than any other country thus far, European nations are closing the gap, according to the report.
In 1998, the U.S. employed 2.1 million Internet workers, or more than four times the 517,000 Internet workers employed in the six European countries studied. By 2002, this gap will narrow to less than two-to-one.
Lack of Talent Stifling Growth
The lack of suitably skilled workers is seen by business leaders on both sides of the Atlantic as the single greatest constraint on future economic growth. The report said, “The overwhelming majority of those interviewed felt that demand for employees with Internet skills and experience easily outstrips supply.”
The report concluded that educational institutions at every level were still not doing enough to “arm the next generation of workers with the appropriate skills.”
“While the growth of the Internet has played a major role in creating the current skills shortage, it is also becoming part of the solution at many companies,” Freeman said.
Freeman added, “Skills needed for Internet-related jobs often lend themselves to new forms of training that are accessible via the Internet and can be rolled out quickly to large numbers of employees across geographies.”
Europe is also catching up to the U.S. in the amount of revenue generated by the Internet. In 1999, the Internet economies in the studied European countries generated $132 billion (US$) in revenue, roughly one fourth of the $507 billion in Internet-related revenue generated in the United States.
By 2002, the Internet sector is expected to be worth $597 billion in the European countries, which is roughly one half the $1.23 trillion forecast for America.
About the Study
The report is based on analysis of publicly available economic data, surveys of companies, government agencies and opinion makers as well as results of interviews with 160 CEOs, senior executives, government officials and industry experts.