Day 41 What does the advancement of the Internet brought us?

What does the advancement of the Internet brought us?

Since 1990s, the Internet boom has brought the global economic into a fast, long-term growth period. Many industrial countries and develop countries such as Australia and India experienced a tremendous economic expansion in the last 15 years. The Internet has totally changed our life pattern, it is in fact, the greatest invention in 19 centuries. So, the questions, why does the Internet apply such huge impact on our life?

The first and maybe the most important effect is the access to information. Imagine if we live in 1980s, the only possible way for us to acquire information it through social media or personal inquiry. For example, we had to wait for our offer results from the university to be published on the local newspaper, after that, we would physically travel to the university for accepting the offer and enrolling in units. In addition, if we wanted to obtain information of the newest product arrived, we had to check the model in the retail store. The access to information is important, because it associated with our cost to search information. In economists’ point of view, every attempt to gather information is a gamble, due to the return is uncertain and there are explicit costs for it. These costs tend to be higher as the difficulty to gather information increases. The Internet minimized the searching cost, thus we are allowed to acquire a decent amount of related information before we make the decision. As a consequence, other costs caused by the information asymmetry will be reduced as well. In addition, the information sharing technology has substantially expanded our knowledge stock. We can access the knowledge conveniently without attend specific field of study. Simply type our questions into the search engine, and we shall find the answer.

Another function of the Internet is the cost reduction, especially the labor costs. The online shopping enables the owner to operate the business with only a few employees or solely by himself/herself. The email and data transfer via the Internet leads to the global enterprises such as Huawei established the international integrate accounting centers, which dramatically cut the expenditure of local branches around the world. Furthermore, the costs of advertising and propaganda are reduced as well. The Internet had breached the monopoly of traditional media on advertisement, since the charge is relatively low and even more efficient. Government’s policies and legislation can be viewed online which saves a lot of paper works than before. Moreover, the information collection cost as stated prior and the travel costs incurred by it are also declined. We may gather information online with relatively no cost, that eliminates the shoe-leather cost during this process.

The Internet linked us with the world. Social websites like Facebook, twitter and blog help us to maintain our social contact with our friends. International news online keeps us on track on the events in the world. The international stock exchange market allows us to manage our investment in other countries via the e-commerce website. Hence the internet work as the connector between us and the world, which is perfectly interpreted by its name, ‘the interactive network’.

In conclusion, every benefit that the Internet brings us is based on its information sharing feature. Thereby the social optimal level of economic surplus should be reached by maximization this characteristic. If the government apply policies to restrict the freedom of the communication via the Internet, there must be a dead-weight associated. However, sometimes the social optimal levels are not applicable due to other issues like infringe of copyrights and society stabilization.