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What does the Internet represent in the French economy? How do we evaluate the contribution of a sector that is not defined by national statistics?

In response to these questions, American firm McKinsey & Company conducted a report on “The impact of the Internet on the French Economy: How the Internet is transforming our country.”

The report was made public on internet-impact.fr. Nevertheless, we couldn’t resist revealing the key lessons.

Internet created 1.15 million jobs

In his presentation, McKinsey argues “the contribution of the Internet, which injects 60 billion euros into the French economy and accounted for 3.2% of the GDP in 2009, is contributing more than other sectors such as transport, energy, agriculture, finance, and even commerce.”

Beyond this direct contribution, the Internet was responsible for a quarter of the French economy between 2004 and 2009. McKinsey estimated that in 2015 the significance of the Internet in the French GDP could rise from 3.2% to 5.5%.

Specifically, the Internet has:

• Created over 700,000 jobs (or 25% of the job market) since 1995,
• Creates 2.4 jobs for every 1 job in the sector
• In total, Internet created 1.15 million jobs (4.2% of the workforce),
• 28% of these jobs were directly created by actors which work directly with the Internet.

"The Internet represented 20% of GDP growth between 2004 - 2009." Black=Growth due to the Internet. Blue=Growth due to the remaining sectors

Internet could represent 25% of GDP growth

E-commerce sales by category (In descending order): Tourism, Electronics, Services, Clothing, Housing decor, Cultural products, Food, Hygiene/Beauty, Games

Within this contribution, notes the report, the private domestic consumption (Internet access through mobile phones, purchases of goods and services on the Internet…) is “32 billion euros, more than of the contribution to the GDP, which 25 billion is just from e-commerce spending.”

Also, if online advertising represented 2.5 billion euros in 2009, “28 billion euros of in store purchases resulted from a search for information online.”

The report also estimates that in 2010, “The value of free services (financed by advertisements) on the Internet is estimated at 7 billion euros by French Internet users, which an 11% expansion of ICT and media, and that “The Internet generated 2.5 billion euros in savings to consumers.”

Left: "Major free services used by consumers." Right: "Value attributed by Internet users to free services."

Internet could create 450,000 jobs by 2015

Based on examples from abroad (USA, UK, and Scandinavian countries), the report notes where France’s Internet economy could improve:

• Contribute to a quarter of French growth over the next three years,
• Create 450,000 jobs by 2015,
• Represent 5.5% of the GDP (129 billion euros).

McKinsey’s experts highlight several obstacles to digital growth, starting with small and medium enterprises which do not use enough of the Internet’s resources. For example, less than half of SMEs (47%) have a website. Another finding stresses that the public sector is not involved enough. The report concludes on the necessity to extend the 2012 French Digital initiative, launched by Eric Besson and encourages private actors to strengthen their infrastructure through the Internet.

The authors of the report do not specifically refer to this point, but they must have considered how the Internet affects the principle issues surrounding the 2012 presidential campaign.

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Download the McKinsey report, along with key figures.

Photo Credits: Flickr CC flyzipper.