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Internet economy surges
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June 10, 1999: 9:49 a.m. ET
Study shows Internet generated an estimated $301B in the U.S. last year
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NEW YORK (CNNfn) - The Internet economy generated an estimated $301.4 billion in the United States last year, a study released Thursday indicates.
Along with those revenues, it also was responsible for creating 1.2 million jobs during 1998, according to the study by the University of Texas Center for Research in Electronic Commerce.
The study, commissioned by networking company Cisco Systems, estimates that of the overall figure, about one-third, or $101 billion, can be attributed to electronic commerce.
Between 1995 and 1998 the Internet economy grew by 174.5 percent, compared with a worldwide economic growth rate of 3.8 percent during the same period. The U.S. Gross Domestic Product grew 2.8 percent during that time.
In addition, the study shows that a large part of Internet growth can be attributed to economic activities being switched from the physical world to the Internet, such as electronic billing, rather than totally new Internet activities being created.
While the Internet sector grew sharply, its $301 billion in revenue still is dwarfed by a U.S. economy of $8.6 trillion.
Still, the size of the Internet economy can't be easily dismissed. It already has outpaced the energy sector (1998 revenue: $223 billion) and is catching up to the auto industry ($350 billion).
More than half of the Internet revenue -- $171 billion -- came from infrastructure and applications as companies sought to ramp up their Internet needs.
These are the areas that are likely to experience continued dramatic growth during this period as companies look to move into intranets and extranets as well, the study concludes. 
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