Refreshing Our Understanding of the Internet Economy

The internet has long since evolved into a rich and diverse ecosystem of new platforms, businesses, and resources that have fundamentally changed the way in which markets function. In many ways, it has been the great economic equalizer, enabling low-cost entry and exit to firms, instant information to actors, transformed consumer expectations, and a geographically neutral market where actors from different ends of the globe can connect and effectively interact regardless of borders. It is opening up new competition and pushing forward the frontier of production as it disrupts entrenched industries, sometimes provoking well-intentioned, but ill-advised reactions. It is fast – essentially instantaneous. It is open. And its evolution has and continues to outpace our attempts to grapple with it in research and policy.The importance of the internet's role in the global economy and national markets is under-researched and under-appreciated. However, beyond matters of attention and scale, the manner in which we conceptualize and approach the internet must also change. It is no longer sufficient from an economic and policy standpoint to lump together the whole of the “Internet” into one amorphous thing. It requires more nuance in how we understand its economic contributions and more depth in the analysis that tries to quantify and make sense of it. To that end this white paper calls for a modernized appreciation of what the internet does for our economy and presents a summation of recent literature to illustrate how and why such an exercise is needed