The 20th century was the age of the computer, and nothing shaped the last two decades as much as the Internet. Nearly every facet of life in advanced economies now interfaces with the web at some point each day, from cell phones and computers to transport systems and energy grids. With telegraphs a distant memory, the postal service struggling to find a way to stay relative and more of our day-to-day lives spent interacting with smart technology, it's hard to image a time in which we didn't have the Internet as part of our lives.

TUTORIAL: The Industry Handbook: The Telecommunications Industry

The McKinsey Global Institute estimates that the Internet accounted for 21% of GDP growth in developed countries over the past five years (it reviewed 13 countries), with most of the economic gains coming from outside of technology industries. Efficiencies created by a shift from traditional accounting and recording methods to ones supported by the Internet have eliminated some jobs, but estimates are that 2.6 jobs are created for every job lost in economies in which firms were modernizing.

In an age in which high-tech industries and financial firms rely on faster and faster Internet speeds to outpace the competition, countries are finding that they have a need for speed if they plan on keeping innovative firms happy. Even small and medium-sized businesses – the sort of companies that politicians talk about fostering – are becoming more and more reliant on online technologies.

While the United States captures the lion's share of Internet-based revenue and profits, other countries are seeing rapid growth rates in Internet usage. According to the International Telecommunication Union, an agency that is part of the United Nations, the United States had more than 83 million broadband Internet subscribers in 2010 (behind only China), the number of subscribers as a percentage of the overall population was below many western European countries, Canada, South Korea and Hong Kong. (For related reading, see The Pros And Cons Of Internet Banks.)

A recent study by Akamai found that the top 10 countries in terms of download speeds were South Korea, Hong Kong, Japan, Netherlands, Romania, Czech Republic, Latvia, Switzerland, Belgium and Ireland. The United States ranked 14th.

Top 10 Average Connection Speeds (World)
1. Tokai, Japan
2. Shimotsuma, Japan
3. Kanagawa, Japan
4. Seocho, South Korea
5. Asahi, Japan
6. Yokohama, Japan
7. Urawa, Japan
8. Ilsan, South Korea
9. Nagano, Japan
10. Hiroshima, Japan

The first city outside Japan or South Korea to make the list was Hong Kong (29), and the first city outside of Asia was Lyse, Norway (33). The United States made its debut with Riverside, Calif. (39).

Top 10 Average Connection Speeds (United States)
1. Riverside, Calif.
2. Staten Island, N.Y.
3. San Jose, Calif.
4. Fremont, Calif.
5. Boston, Mass.
6. Jersey City, N.J.
7. Marietta, Ga.
8. Anaheim, Calif.
9. Traverse City, Mich.
10. Hollywood, Fla.

Adoption of broadband Internet has increased across the world in recent years. The United States has a 77% adoption rate, far below the 90% plus of Hong Kong and many European countries.

The Bottom Line
Improving Internet speed requires a long-term commitment to investment in infrastructure, enough industry competition to prompt innovation and efficiencies and pricing models that allow a broader swath of a country's population to have access. The more far-flung a country's population is, the more difficult (and expensive) it may be to wire them in. But with so much riding on integrating more people into the web, both the developed and the developing world cannot afford to sit by as rival countries modernize.

Related Articles
  1. Economics

    Will North and South Korea Ever Reunite?

    North and South Korea have been divided for over six decades. Some analysts think the two countries could reunify within the next 10 years.
  2. Entrepreneurship

    Here Are The 6 Hottest New York Startups Of 2015

    Meet the latest generation of leading New York startups, which may pose a serious threat to their Silicon Valley counterparts.
  3. Economics

    Toshiba Highlights the Need for Faster Corporate Reform in Japan

    There is no doubt that Japan is still a leader in technology and production excellence, but that edge is in danger of being squandered.
  4. Mutual Funds & ETFs

    The Top 5 ETFs For Investing in Japan

    Look at a list of some of the best Japan ETFs in today's market, and how investors can use hedged or leveraged ETFs to mitigate risks or exaggerate returns.
  5. Mutual Funds & ETFs

    The Top 3 ETFs For Investing in South Korea

    Learn more about the small yet growing number of South Korea ETFs, which track the often forgotten Asian Tiger responsible for Samsung, Kia and Hyundai.
  6. Retirement

    Is Cohousing Right for You?

    Cohousing isn't for everyone. But if you're community-minded or committed to living green, it may be an ideal option for you.
  7. Mutual Funds & ETFs

    ETF Analysis: Vanguard MSCI EAFE

    Learn more about Vanguard's index-shifting, low-cost and non-U.S. market exchange-traded fund: the FTSE Developed ex U.S. Markets ETF.
  8. Investing

    Some Overseas Markets May Prove More Resilient

    Though global markets sold off and have continued to slip in recent days, stocks in Europe and Japan are still faring better than their U.S. counterparts.
  9. Investing

    Is There Still Opportunity in Japanese Stocks?

    Japanese stocks’ strong performance has prompted market watchers to question whether there’s still a case for adding exposure to the Land of the Rising Sun
  10. Mutual Funds & ETFs

    Are Currency Hedged ETFs a Good Idea?

    Considering currency-hedged ETFs? Here's a look at eight and what you need to know right now.
RELATED TERMS
  1. Asian Infrastructure Investment ...

    The Asian Infrastructure Investment Bank (AIIB) is an international ...
  2. Next Eleven

    Also known as N-11, these are the eleven countries that, according ...
  3. Abenomics

    Nickname for the multi-pronged economic program of Japanese prime ...
  4. Lost Decade

    The 1990s for Japan, and the first decade of the current millennium ...
  5. Structural Unemployment

    A longer-lasting form of unemployment caused by fundamental shifts ...
  6. Happiness Economics

    The formal academic study of the relationship between individual ...
RELATED FAQS
  1. What countries represent the largest portion of the global Internet sector?

    As of December 2013, Internet users in 20 countries made up 74% of the global Internet sector, according to Internet World ... Read Full Answer >>
  2. What are some of the drawbacks of industrialization?

    In economic history, industrialization is the social and economic transformation of the human group from an agrarian society ... Read Full Answer >>
  3. How can I increase my standard of living in my retirement years?

    If you're decades away from retirement, the best way to ensure a decent standard of living during your golden years is to ... Read Full Answer >>
  4. What kinds of financial instruments are designated as “Securities” by Cabinet Order?

    In Japan, securities are regulated by the Diet and the Financial Services Agency, or FSA. Rulings about securities come down ... Read Full Answer >>
  5. What governments have used the human development index (HDI) to set policy?

    The Human Development Index (HDI) is a United Nations measurement tool to compare human prosperity between countries. Most ... Read Full Answer >>
  6. What are the key metrics of the human development index (HDI)?

    The key metrics of the standard U.N. Human Development Index (HDI) are health, education and income. These metrics were chosen ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!