The cost of shutting down the Internet

A view from Website Builder Expert (WBE)…

Reliance on the internet for daily functions has fast become a worldwide phenomenon.

Our dependence on the Internet of Things is only set to increase with the recent eruption of digital home assistants and the concept of the smart home no longer just a figment of the imagination. Many people, both personally and professionally would be lost without the internet. Businesses, both small and large wouldn’t be able to continue their everyday activities should the internet cut out. Governments, even, would come to a stand still without the power of the internet to keep them running.

An internet outage is the modern day equivalent of a blackout, except there is nothing the non-technical individual would be able to do about it. There is no digital equivalent of lighting a candle to enable you to function through a power cut. There is a deep divide between our ability to use the internet and our understanding of how it actually works. We would be helpless in the face of disaster. Imagine the frustration, the outrage and ultimately the financial losses incurred if there was a worldwide internet power cut. An internet blackout, a complete and utter loss of connection, would send the individual into dismay at losing contact with friends and not being able to laugh at Trump’s latest blunders on Twitter.

Every hour, over 230 thousand search queries are made on Google. That means that without the internet for just one hour, 230 thousand questions would go unanswered. And what if the internet broke down for a day? That’s over 5.5 billion questions that would remain a mystery to the inquisitive minds asking them. Of those search queries, many will be of a commercial nature. This means that without the internet, it is businesses and ecommerce businesses in particular, that will suffer the most. The ecommerce industry worldwide would lose millions if the internet was cut off for even just one hour.

What is the risk of an internet outage?

It is a little known fact that in many countries across the globe, governments are in possession of an Internet Kill Switch. This gives them the power to shut down the internet should they see fit. The United States is said to have a program that enables the government to cut off the internet in times of national emergency should this become necessary. There is some speculation as to whether this ‘Kill Switch’ actually exists, but if it does, the US Internet is literally in the hands of President Trump – which means anything could happen!

In the United Kingdom, the Secretary for Culture, Media and Sport has the power to suspend internet services in the case of serious cyber security breaches. And China’s notoriously volatile internet is controlled and censored by their government, meaning regular localised outages are not uncommon in the country. However, it’s not just governments that could induce an internet interruption for a country’s protection. Loss of connection can also stem from malicious means.

One of the more recent threats to the internet is cable cutting. The transmission of information through fiber optic cables is what keeps the internet alive – in fact, 99% of all internet data is transmitted through them. Many of these cables reside under the ocean and were one to be sabotaged by deep sea grappling hooks, as speculated by military experts, the internet would suffer catastrophic consequences.

But what exactly are those consequences? And how much would the world’s economies suffer without the internet?

We looked at publicly available data from eMarketer concerning yearly ecommerce sales made by 22 countries worldwide that have a substantial ecommerce presence. Dividing yearly ecommerce revenue by the number of hours in a year gave us some shocking statistics:

The Top 10 Losers
Rank / Country / Loss per Hour (Millions)
#1 China / $179.04
#2 US / $55.02
#3 UK / $15.10
#4 Japan / $13.98
#5 Germany / $9.43
#6 India / $6.31
#7 France / $6.08
#8 South Korea / $5.77
#9 Canada / $4.54
#10 Russia / $3.47

Should the world experience an internet outage, China is set to be the biggest loser by far. For each hour without internet, the country’s economy would lose a whopping $179 million. China’s loss more than trebles that of the US, the second biggest loser, who would see $55 million drain from their economy hourly with a collapse of the cybersphere. In fact, China’s loss almost doubles that of the other countries in the top 5 put together!

To break this down even further, if the internet cut out for even a minute, China would lose just under $3 million ($2.98 million) and the US just under $1 million (916,933). This means that in one minute, China’s cataclysmic loss surpasses what most of the countries outside of the top 10 would lose in an hour!

To delve deeper into the financial impact of a cyber crash, we cross-referenced each country’s hourly losses with their annual GDP. While the figures are minuscule in terms of % of GDP lost from an hour without internet, this research produced an interesting ranking.

So who loses the most GDP without the internet?

Rank / Country
#1 China
#2 UK
#3 Denmark
#4 South Korea
#5 Finland
#6 Norway
#7 Japan
#8 Canada
#9 US
#10 Germany

Finland and Denmark, who rank 1 and 2 respectively for countries who would lose the least in the occurrence of an internet outage would actually lose larger percentages of their GDP than most other countries on the list. Denmark ranks as the third biggest loser in terms of percentage of GDP lost with Finland coming in fifth.

The Slavic economies rely more heavily on ecommerce than the Latin American countries, with Mexico and Brazil set to lose some of the smallest proportions of their GDP without the internet.  They rank 3rd and 4th respectively in terms of countries losing the smallest % of GDP. This is despite Brazil ranking just outside of the top 10 biggest lump sum losers (11th).

Surprisingly, despite being the second biggest loser in pure monetary terms, the US ranks 9th in terms of GDP losses. While their ecommerce spend is the second largest globally, their economy doesn’t rely as heavily on online sales as others to rake in the big bucks.

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