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RealTime IT News

The Internet as Job Creator

New report predicts the online medium will have added 10 million digital and traditional jobs to the economy in the United States and Europe by 2002.

The booming Internet economy is a giant job factory, and by 2002, it will employ more than 10 million people across a variety of industries in the United States, the five largest European economies and Ireland, says a new report.

And although the United States continues to have the world's most advanced digital economy, Europe is starting to close the gap, says the study released by Andersen Consulting.

The report examines the impact of the Internet on the economies of the United States, France, Germany, Ireland, Italy, Spain and the UK. Brazil, which has the largest Internet economy in Latin America and attracts significant U.S. and European investment, was also included in the research.

Viewed as a line of business itself, the Internet will have directly created 5.8 million jobs in the United States and 3 million jobs in the six European countries surveyed by 2002. These are defined as jobs created by Internet pure play companies, portals, software consultants, Web designers, and telecommunications and ISPs.

When Internet-related jobs in other industries are factored into the forecasts, the total number of jobs created in the U.S. and European countries jumps from 8.8 million to more than 10 million, the study found.

Europe is definitely catching up to the United States on the job front. In 1998, the Internet economy employed four times as many people in the U.S. as in the six European countries studied (2.1 million Internet economy employees in the U.S compared to 517,000 in Germany, France, Ireland Italy, Spain and UK). By 2002, this ratio will be lower than two-to-one, the report projects.

"The good news is that the Internet is creating more jobs than it is destroying, even when you look at traditional business models," said Steve Freeman, a partner at Andersen Consulting who specializes in e-commerce and Internet strategies. "And this peripheral job creation is likely to be significant in the short term as established businesses invest in building up new Internet operations alongside their existing businesses."

So what's the bad news? Business leaders on both sides of the Atlantic continue to see the lack of suitably skilled workers as the single greatest constraint on future economic growth, the report says.

So if you've been complaining about the lack of good hires lately, you're not alone.

"The overwhelming majority of those interviewed felt that demand for employees with Internet skills and experience easily outstrips supply," the report said. Many pointed to the lack of computers in schools and a lack of government-financed or government-led initiatives.

"The U.S. certainly leads the way in terms both of relevant courses offered at university level and the numbers of students enrolled in them," the report said. But it said that educational institutions at every level are still not doing enough to arm the next generation of workers with the appropriate skills.

The report is based on analysis of publicly available economic data, surveys of companies, government agencies and opinion makers as well as results of interviews with 160 CEOs, senior executives, government officials and industry experts.