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Ad Group Says Internet Accounts For 5.1M US Jobs, 3.7% of GDP
lpress writes "A Harvard Business School study sponsored by the Interactive Advertising Bureau shows that the ad-supported Internet is responsible for 5.1 million jobs in the U.S. — two million direct and 3.1 million indirect. They report that the Internet accounted for 3.7% of 2011 GDP. The research, development and procurement that launched the Internet back in the 1970s and 1980s cost the US taxpayers $124.5 million at the time — not a bad investment!" Your calculations may vary.
So is this meant to be some sympathy piece for why we should all feel guilty for ad-blocking ala the anti-piracy ads of the MPAA? Sorry, but you ad people are sleazy scumbags who can all be run off the cliff for all I care.
So does that mean my Adblock Plus/NoScript combo is killing jobs?
If so, I'm too satisfied with my ad-free internet to really give a damn.
So the employment is much larger than the movie and music industries.
And the video game industry is also larger than movies and music.
Why is the tail always doing the barking for the dog again?
If you're a zombie and you know it, bite your friend!
Yes you fucking communist terrorist. Git out of muh country! *cocks gun*
Sorry, I prefer mercurial over git. And where is that muh country you are speaking of? :-)
The Tao of math: The numbers you can count are not the real numbers.
This is just indicative of how our society is going downhill. America cannot be viable long term on a service-based economy. We must do more manufacturing. Those that own the means of production have the ability to rapidly innovate. If we don't stem the tide of partisan corruption and sending manufacturing overseas, the United States is going to go the way of Rome and our future will be studying us in textbooks much like we study Ancient Rome.
Harvard Business School Study Sponsored by Ad Group Says Internet Accounts For 5.1M US Jobs, 3.7% of GDP
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Of course an advertising organization would twist this.
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Like the music industry, the advertising industry is using jobs numbers to imply that they are inherently good. Like the music industry, there is an ideal level of their product -- the level at which it maximizes the long-run GDP growth rate. Beyond that point, increasing employment in their industry harms GDP growth by applying resources (labor in this case) beyond the efficient allocation level.
The music industry has a government granted monopoly in copyright. When that grant becomes too powerful, the industry consumes more resources than is efficient and is a net drag on the economy. Their employment numbers climb while their net contribution to the economy becomes negative.
Advertising, at its worst, distorts consumer behavior and causes unearned cashflow. This unearned cashflow causes corporations to focus their product development on features that advertise well even if they do not result in genuine customer satisfaction, resulting in a net drag on the economy. A portion of the distorted cashflow is channeled back into advertising to keep the distortion running despite negative customer experieneces. As employment in advertising rises past the efficient level, each additional job represents a net cost to the economy.
In any industry, not just those two mentioned, there is a GDP maximizing level of employment. Going beyond that point costs us all in the long run. In traditional industries, that point is defined by the guns versus butter balance. But that is only an upper bound. In industries that have a structural inefficiency, like government granted regulatory monopolies or the potential to distort consumer behavior, the balancing point is reached at a lower level. In those industries, using employement as a measure of societal benefit is particularly perilous.
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Headlines like "Internet accounts for 5 million jobs and 4% of the economy" are misleading because they do not say how many jobs the internet made obsolete or how much older economic activity is no longer needed. In the same way that agricultural labor went from 90% of the US workforce (200 years ago) to about 2% (although lots of people still garden as a hobby), manufacturing etc. is going from around 35% of the US workforce (50 years ago) to around 10% now and probably, like agriculture, around 2% fairly soon. The decline of paid manufacturing labor is inevitable given flexible robotics and 3D printers and so on. Just look at a stream of slashdot articles on robotics and such. I agree that thinking the "service" economy is going to provide jobs, like some say, is ridiculous -- but I feel it is because service robotics and AI and free information exchange is proliferating. We need to fundamentally rethink the notion of an income-through-jobs link as the main thing granting a right to consume the fruits of our increasingly automated agricultural, industrial, and service sectors (see the 1964 "Triple Revolution Memorandum" and Marshall Brain's recent story "Manna"). We need to some combination of a "basic income", a proliferation of personally-owned means of production (like gardening robots, 3D printers, and solar panels), an expanded gift economy like via GNU/Linux and Wikipedia and the Creative Commons, and better internet-facilitated participatory government planning at all levels. More details are here:
http://www.pdfernhout.net/beyond-a-jobless-recovery-knol.html
For good or bad, the wage-based economy as we knew it is in its final death spiral. The stronger the demand for decent wages and good working conditions, the faster most jobs of any sort will be automated. For example, here is a robotic system under development that can replace most fast-food workers:
http://econfuture.wordpress.com/2012/10/01/fast-food-robotics-an-update/
There may be some jobs that will be exceptions to automation for longer periods of time (for example, ones at Google developing AI to replace more jobs), but overall that is the trend. Here is a related video parable I made about that:
"The Richest Man in the World: A parable about structural unemployment and a basic income"
http://www.youtube.com/watch?v=p14bAe6AzhA
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Switzerland is a terrible example because it is a relatively small country with a large banking sector that essentially prospered in part by skimming a percentage off of huge global economic flows (including historically shielding transactions of dubious legality via their privacy laws). Such a pattern of success can't work that way for everyone, as nice a country as Switzerland may be in many respects..
http://en.wikipedia.org/wiki/Economy_of_Switzerland
The central issue regardless of what jobs people do is that so much wealth has become concentrated in so few hands. This has happened in big part because the value of automated capital managed by large bureaucratic systems with monopolies over markets is triumphing over the value of individual human labor. See Marshall Brain's "Robotic Nation" article for more details:
http://marshallbrain.com/robotic-nation.htm
You can't have a "service" economy when robotics and AI is better than most people for most tasks. You can't have a service economy when most things become manufactured so well they don't need much servicing or it is just cheaper to replace them with new things fresh from the automated factory.
That said, I feel that your other points on the US/Roman comparison are insightful.
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Does this mean government can create jobs or am I misssing something?
They have the indirect-direct correlation backwards. I would describe those 2 million as indirect jobs of other economic forces. I.e., ad supported internet jobs are there because others do things that want/need advertising.