The 20th century was the age of the computer, and nothing shaped
the last two decades as much as the Internet. Nearly every facet of
life in advanced economies now interfaces with the web at some
point each day, from cell phones and computers to transport systems
and energy grids. With telegraphs a distant memory, the postal
service struggling to find a way to stay relative and more of our
day-to-day lives spent interacting with smart technology, it's hard
to image a time in which we didn't have the Internet as part of our
lives.
The McKinsey Global Institute estimates that the Internet accounted
for 21% of GDP growth in developed countries over the past five
years (it reviewed 13 countries), with most of the economic gains
coming from outside of technology industries. Efficiencies created
by a shift from traditional accounting and recording methods to
ones supported by the Internet have eliminated some jobs, but
estimates are that 2.6 jobs are created for every job lost in
economies in which firms were modernizing.
In an age in which high-tech industries and financial firms rely on
faster and faster Internet speeds to outpace the competition,
countries are finding that they have a need for speed if they plan
on keeping innovative firms happy. Even small and medium-sized
businesses – the sort of companies that politicians talk about
fostering – are becoming more and more reliant on online
technologies.
While the United States captures the lion's share of Internet-based
revenue and profits, other countries are seeing rapid growth rates
in Internet usage. According to the International Telecommunication
Union, an agency that is part of the United Nations, the United
States had more than 83 million broadband Internet subscribers in
2010 (behind only China), the number of subscribers as a percentage
of the overall population was below many western European
countries, Canada, South Korea and Hong Kong.
A recent study by Akamai found that the top 10 countries in terms
of download speeds were South Korea, Hong Kong, Japan, Netherlands,
Romania, Czech Republic, Latvia, Switzerland, Belgium and Ireland.
The United States ranked 14th.
Top 10
Average Connection Speeds (World)
1. Tokai, Japan
2. Shimotsuma, Japan
3. Kanagawa, Japan
4. Seocho, South Korea
5. Asahi, Japan
6. Yokohama, Japan
7. Urawa, Japan
8. Ilsan, South Korea
9. Nagano, Japan
10. Hiroshima, Japan
The first city outside Japan or South Korea to make the list was
Hong Kong (29), and the first city outside of Asia was Lyse, Norway
(33). The United States made its debut with Riverside, Calif.
(39).
Top 10
Average Connection Speeds (United States)
1. Riverside, Calif.
2. Staten Island, N.Y.
3. San Jose, Calif.
4. Fremont, Calif.
5. Boston, Mass.
6. Jersey City, N.J.
7. Marietta, Ga.
8. Anaheim, Calif.
9. Traverse City, Mich.
10. Hollywood, Fla.
Adoption of broadband Internet has increased across the world in
recent years. The United States has a 77% adoption rate, far below
the 90% plus of Hong Kong and many European countries.
The
Bottom Line
Improving
Internet speed requires a long-term commitment to investment in
infrastructure, enough industry competition to prompt innovation
and efficiencies and pricing models that allow a broader swath of a
country's population to have access. The more far-flung a country's
population is, the more difficult (and expensive) it may be to wire
them in. But with so much riding on integrating more people into
the web, both the developed and the developing world cannot afford
to sit by as rival countries modernize.