This report also begins a discussion about the potential impact on the economy of the Internet and electronic commerce. Recent rapid growth of the Internet is in part attributable to its strength as a medium of communication, education and entertainment, and, more recently, as a tool for electronic commerce. Businesses in virtually every sector of the economy are beginning to use the Internet to cut the cost of purchasing, manage supplier relationships, streamline logistics and inventory, plan production, and reach new and existing customers more effectively. Cost savings, increased consumer choice and improved consumer convenience are driving growth in the sale of physical goods and in the digital delivery of goods and services via the Internet. Because the Internet is new and its uses are developing very rapidly, reliable economy-wide statistics are hard to find.
Further research is needed.
This report therefore uses industry and company examples to illustrate the rapid pace at which Internet commerce is being deployed and the benefits being realized. Fewer than 40 million people around the world were connected to the Internet during 1996. By the end of 1997, more than 100 million people were using the Internet. As of December 1996, about 627,000 Internet domain names had been registered. By the end of 1997, the number of domain names more than doubled to reach 1.5 million.