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The Internet and Economic Growth

By: Fanele Chester (Communications Intern)

One of the factors which got me hired as the Communications intern at the Federation of

Swaziland Employers & Chamber of Commerce is my informal but extensive knowledge and

understanding of computers in general. Whilst an Economics & French major at the University

of Chicago, as well as a student intern on the Apple Campus Store, I started and ran a relatively

successful blog, Fashion Et Al: Promoting African Creativity on www.fanelelove.com, which

focused on all things art related in and from Africa.

Depending on who is posing the questions, when describing the success of the blog, Fashion Et

Al, the focus can be on the technical or the creative end of the spectrum. For the latter, visitors

come and return to the blog for its well-written and well-researched features. For the former, the

story is more interesting and is an illustration of a global conversation: how the internet is

transforming the global economic landscape.

Fashion Et Al is hosted on Blogger, a free Google platform for blogs. A blog (web log) is an

online platform which allows one to be the writer, editor, and publisher of information. When I

create and publish a post on Fashion Et Al, within seconds it immediately updates on my Twitter

account, Facebook wall, as well as the blogs fan page on Facebook, and on a separate blog on

Tumblr (another hosting site for blogs). The fan page automatically retweets this same message

on my Twitter. Finally, a Networked Blogs application enabled on my Facebook account extracts

the same blog and posts it on the wall.

In the end, one blog postis circulated on social media three times on Twitter reaching about 70

followers each time, four times on Facebook reaching about 1600 friends and 400 fans each

time, and once on Tumblr reaching 7 followers. This is excluding the 60 individuals who have

directly subscribed on the blog itself via the Gmail accounts, who get updates either through

email or on their Google Reader.All of this mileage is completely free! The beautiful thing about

this interconnectivity is that it was engineered through the authors own innovation. The linkages

between all the social media sites are not default settings on the template provided by Google.

In Swaziland, when we talk about advertising and marketing mileage, the most economical and

effective tool is the radio, followed by print media and television. The internet does not play asignificant role in economic landscape of the country, and contributes a negligible percentage in

the total economic growth of the country. This is despite the fact that the United Nations, in its

Millennium Development Goals, lists internet penetration as a key metric in efforts to reduce

poverty and encourage national development.

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A study was conducted by the McKinsey Global Institute (published May 2011) on the

contribution of the internet to GDP and economic growth in the G8 countries and other five key

countries at various level of development (Brazil, China, India, South Korea, and Sweden).

EntitledInternet Matters: The Nets Sweeping Impact on Growth, Jobs and Prosperity, was

structured on Consumption & Expenditure on one hand, and Supply on the other.

The main findings of the study were that internet consumption and expenditure contributes

significantly to the economy, and that countries with a strong internet ecosystem also have a high

contribution to GDP. In fact, the internets global contribution to GDP is bigger than the GDP of

Spain or Canada, and growing faster than Brazil! This is despite the fact that, although available

in all countries around the world, the internet is still in its infancy stage and its influence is still

expanding. As recently as at the eG8 Forum held in Paris last week, leaders upheld the internet

as a revolutionary force changing everything.

A surprising and little known detail about the potential for economic growth held by the internet

is that it derives its power through the economic modernization of traditional activities. Although

its a new world phenomenon, the backbone of the entire internet ecosystem is (telecom)

infrastructure. This infrastructure is the platform upon which users and organizations

experience the internet, and upon which entrepreneurs and businesses innovate (Internet

Matters, MGI, May 2011). Renowned Harvard Business School professor Rosabeth Moss Kanter

concluded in an article published on Harvard Business Review last Thursday, ...telecoms are

capturing most of the wealth being generated from the internet. For all the new world hype, the

world still has a major role to play.

In conclusion, the benefits of the internet, especially for developing countries, and in particular

for Swaziland as we face an economic crisis, are unmistakable and must be taken into

consideration as we forge forward with a new strategy for growth. That being said, the success of

assimilating internet as a performance booster for the country depends on the current

infrastructure. It is imperative that such infrastructure, which propagated the country from low

income to low middle-income status are further improved, as these will be the platforms upon

which the necessary innovations for economic growth provided by the internet will be created.

Full sources are available upon request. Please email Fanele Chester atfanelec@business-

swaziland.com. Produced by the Communications Office at the Federation of Swaziland

Employers & Chamber of Commerce.