Fact of the Week: The Internet Increased the Global Economic Growth Rate by 0.7 Percentage Points Between 1995 and 2016

Source: Sayef Bakari, “Innovation and Economic Growth: DoesInternet Matter?” June 2019, Faculty of Economic Sciences and Management of Tunis, University of Tunis El Manar.

Commentary: The rise of the Internet has allowed billions of people to access services that would not exist otherwise, while driving the growth of technologies that power them. A new study has attempted to quantify this effect, examining the rate of Internet usage across 76 countries between 1995 and 2016. It finds that for every 1 percent increase in the number of people using the Internet, patenting increases by 0.088 percent and economic growth increases by 0.002 percent. While these effects might sound small, the number of Internet users in the U.S. increased by nearly a factor of 10 over this period—and by a factor of over 75 worldwide. Thus, the paper estimates that the Internet has increased economic growth by 0.38 percentage points in the U.S. and by 0.71 percentage points worldwide, and it has increased patenting by 20.3 and 38.4 percent, respectively.