Web savvy businesses grow twice as fast

The below is a very interesting excerpt from a new McKinsey Institute report released last week at the eG8 Forum in Paris.

“The evidence is abundantly clear: Internet usage triggers a significant increase in performance in businesses at all levels and particularly among SMEs and other entrepreneurial endeavors. We surveyed more than 4,800 SMEs in 12 countries (our study group excluding Brazil) and found that those utilizing Web technologies grew more than twice as fast as those with a minimal presence (see Exhibit). The results hold across all sectors of the economy. Further, Web-savvy SMEs brought in more than twice as much revenue through exports as a percentage of total sales than those that used the Internet sparingly.

These Web-knowledgeable enterprises also created more than twice the jobs as companies that are not heavy users of the Internet. When we look closely at individual sectors, we see that this is true across sectors from retail to manufacturing. Manufacturing is one of the sectors enjoying most impact from Internet.

On average, the survey showed that the Internet enabled a 10 percent increase in profitability across countries. The impact on profits came half from increased revenues, and half from lower costs of goods sold and lower administrative costs.”

Another very interesting result from the McKinsey’s study is that the internet has contributed 21% of all GDP growth in developed countries. This is a result of enhanced communication between stakeholders, computerisation and automation and in general enabling businesses to do more with less.

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