Amid Global Rise Of Internet Outages, Internet Society Launches ‘NetLoss’ Calculator To Measure Economic Impact

Innovative NetLoss Calculator Uses Unique Econometric Framework To Provide A New Level Of Accuracy In Estimating The Impact Of Internet Outages Around The World

WASHINGTON, June 28, 2023 /PRNewswire/ — The Internet company today launched the NetLoss Calculator, a revolutionary tool that measures the economic impact of Internet outages around the world. Hosted at Internet Society Pulse platform which tracks and analyzes closures, NetLoss uses an innovative econometric framework to understand the impacts of closures and provides an unprecedented level of rigor and accuracy in estimating their economic harm.

Internet outages globally hit a record high in 2022with governments around the world ordering the limitation or blocking of Internet access and services during civil unrest, school exams and during elections, with severe economic consequences.

According to the NetLoss Calculator:

Governments often mistakenly believe that internet outages will calm turmoil, stop the spread of disinformation, or lessen the damage caused by cybersecurity threats. But the closures are extremely disruptive to economic activity: they block e-commerce, generate losses in urgent transactions, increase unemployment, disrupt business-customer communications and create financial and reputational risks for companies. They have also hurt the growth of a country like research shows Internet adoption has a positive impact on gross domestic product (GDP).

The Internet Society has long opposed the practice of internet shutdowns and urges all governments to refrain from implementing them due to the damage they inflict on a nation’s economy, civil society and internet infrastructure. With NetLoss, organizations and advocates can demonstrate to governments and regulators how a shutdown will negatively impact their nation’s economy.

In addition to the estimated cost of an Internet shutdown (aka the loss of GDP), the Internet Society’s NetLoss calculator also estimates:

  • The change in the unemployment rate due to a shutdown.
  • The amount of foreign direct investment (FDI) lost due to a shutdown.
  • Risk of closure: the probability that a country will experience a closure.

“The global increase in internet shutdowns shows that governments continue to ignore the negative consequences of undermining the open, accessible and secure nature of the global internet,” he said Andrew Sullivan, President and CEO of the Internet Society. “The calculator is an important step forward for the community of journalists, policy makers, technologists and other stakeholders who are pushing back against the harmful practice of internet shutdowns. Its innovative and fully transparent methodology will help show governments around the world that shutting down the Internet is never a solution”.

Methodology

The calculator considers a broad range of economic impacts beyond traditional measures of economic output, such as GDP, to demonstrate the financial impact of an internet shutdown. It also includes the change in the unemployment rate, the amount of foreign direct investment (FDI) lost, and the risk of future shutdowns.

In addition to its primary indicators, the methodology of the NetLoss calculator also takes into account other factors that may affect country-specific economic performance, including the age-dependency ratio (percentage of workers aged 18-65 in the population total), the fraction of the population living in urban areas and the percentage of the labor force with a basic education.

Using the following open datasets, the methodology of the NetLoss Calculator is reproducible and transparent:

  • Stop data: Includes detailed event-level data on government-mandated shutdown events.
  • Protests and civil unrest: Includes detailed event-level data on various events, their start and end dates, parties involved, and associated fatalities.
  • Elections: The constituency-wide election archive maintained by Yale University provides election data for 150 countries since 1960.
  • Socioeconomic indicators: The World Bank provides data on economic indicators, including per capita GDP, employment, inflation and foreign investment.

The framework used in the NetLoss calculator is based on the Internet Society’s longstanding research and advocacy on this issue via the Pulse platform. Launched in December 2020Internet Society Pulse consolidates trusted third-party Internet measurement data from various sources into a single platform to examine Internet trends and tell data-driven stories so that policy makers, researchers, journalists, network, civil society groups and others can better understand the health, availability and evolution of the Internet.

The data source for NetLoss is the World Bank’s World Development Indicators, which typically correct for minor statistical changes. The data used in the calculator is updated quarterly.

The NetLoss Calculator is available at: https://pulse.internetsociety.org/netloss

Internet company information
Founded in 1992 by Internet pioneers, the Internet Society is a global non-profit organization working to ensure the Internet is for everyone. Through its community of members, special interest groups, and more than 130 chapters worldwide, the organization advocates and promotes Internet policies, standards, and protocols that keep the Internet open, globally connected, and secure. For more information please visit internetsociety.org.

SOURCE The Internet Society

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