Malaysia’s Internet GDP Larger than U.S. or China, says report

The Internet has grown to become a major Malaysian industry and one that contributes more to Malaysia’s GDP than it does to the U.S or China, according to the “Online and Upcoming: The Internet’s Impact on Aspiring Countries” report, a new joint research by McKinsey & Company and Google.

The Internet contributes 4.1% to Malaysia’s GDP

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p>The reports estimates that the Internet contributes 4.1% of Malaysia’s Gross Domestic Product (GDP) in 2010, or US $9.75 billion of the 2010 GDP of US$238 billion (World Bank [PDF] estimate) – placing Malaysia among the highest of the 30 fast-growing countries that the report highlights as crucial to the Internet’s future.

The government’s strong promotion of ICT has resulted in broadband penetration doubling between 2008 and 2010. Malaysia’s stock of secure Internet servers has also doubled per capita since 2007, giving it 25 times as many per capita as the rest of South Asia.

Malaysians spend most time online

According to the report, Malaysians now spend more time surfing the Internet than they spend consuming any other media, including watching television, listening to the radio, and reading newspaper. 1 out of every 3 minutes spent online is on social networking.

However, domestic online consumption is below average. Only 40% in Malaysia, compared to 70% average in other countries.

Malaysia business yet invest in Internet advertising

While Malaysian businesses sell more things online than many other countries with a similar wealth but they have yet to invest in Internet advertising. Only 1% of Malaysian businesses advertise online, which is bottom 10% of the 57 countries ranked for the index.

“Online and Upcoming: The Internet’s Impact on Aspiring Countries” report is the first of its kind to measure the contribution the Internet makes to economies.

The report suggests to decrease the cost of doing business on the Internet and encourage the growth of human and financial capital in order for SMEs to capture the full potential of the Internet in Malaysia. The full report is available here.

Image credit: Vasyl Helevachuk