Internet Shutdowns Cost $2.4 Billion Last Year - Global Trade Magazine
  October 14th, 2016 | Written by

Internet Shutdowns Cost $2.4 Billion Last Year

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  • The internet accounts for six percent of U.S. GDP.
  • Developing nations have become more reliant on the internet.
  • There were 81 short-term internet shutdowns in 19 countries over the past year.

A 2015 study found that the internet generates around $966 billion in economic activity in the United States, about six percent of total GDP, and accounts for half a million jobs.

Imagine the impact of even a partial shutdown of the internet in the U.S.

Better yet, imagine the impact of the an internet shutdown in a developing country.

Developing nations have become even more reliant on the internet and digital technology has expanded its role in the overall economy,” notes a recent report from the Brookings Institution.

Actually, imagination is not required. In 2011, Egyptian authorities shut down the entire internet in that country for five days, seeking to disrupt street protesters who were demonstrating against the government. In the wake of the shutdown, the Organization for Economic Development and Cooperation (OECD) found that decision cost Egypt $90 million and if it had continued for an entire

year, the shutdown would have reduced the country’s gross domestic product by three to four

percent.

The Egyptian shutdown is not an isolated phenomenon. In recent years, several countries have

blocked apps, shut down instant messaging, and turned off mobile services, in addition to disrupting the entire internet. The Brookings report found 81 short-term shutdowns in 19 countries over the past year. The analysis concludes that the shutdowns cost at least $2.4 billion in GDP globally, 40 percent of which was incurred by India, 19 percent by Saudi Arabia, 13 percent by Morocco, and nine percent by Iraq.

“These are conservative estimates,” the report notes, “that consider only reductions in economic activity and do not account for tax losses or drops in investor, business, and consumer confidence.”

The report demonstrates that the growing level of internet disruptions is “creating significant detrimental impacts on economic activity” in several countries around the world, and especially in the developing world.

As the digital economy expands, it will become even more expensive for nations to shut down the internet,” the report concludes. “Without coordinated action by the international community, this damage is likely to accelerate in the future and further weaken global economic development.”


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