Internet report uncovers local surprise

Photo / Brett Phibbs

Small business are increasingly targeting customers in their local area through the internet, a senior Google executive says.

Google Australia and New Zealand managing director Nick Leeder said he was amazed new research showed small firms were more focused on winning customers nearby rather than selling to the world.

"A lot of small businesses were saying, which was a bit surprising, that they are using the internet as a way of more efficiently reaching customers who might well be local," Leeder said. "I was expecting them to say that they were reaching customers who were outside their geographic footprint."

Leeder was speaking to reporters at the launch of "The Connected Continent: How the internet is Transforming Australia's Economy" report in Sydney on Tuesday.

The report, prepared by Deloitte Access Economics, found the internet made a direct contribution to the Australian economy of A$50 billion ($62 billion), or 3.6 per cent of gross domestic product.

"This contribution is of similar value to the retail sector or Australia's iron ore exports," the report said.

In terms of the outlook, the report said the direct contribution to the Australian economy over the next five years would increase by A$20 billion, or 7 per cent, to A$70 billion.

This growth was twice as fast as the rest of the economy, the report said.

The report found the internet yielded A$27 billion in productivity increases to business and government, which flowed through to lower prices and new products, and delivered benefits of about A$53 billion to households.

Were it not for the internet, Australia's poor level of productivity growth in recent times would have been even worse, said Deloitte Access Economics director Ric Simes.

Leeder said research had shown that for every job lost due to the internet, 2.6 new jobs were created.

"While overall it is good, a change like that does create friction," Leeder said.

- AAP