Effect of Internet on the Economic Growth - Research Proposal Example

Effect of Internet on the Economic growth Name Institution Table of Content Page Executive Summary………………………………………………………………………3 1.0 Introduction…………………………………………………………………………..4 1.1 Background information………………………………………………………4 1.2 Research Problem ………………………………………………………….…5 1.3 Purpose of the Study…………………………………………………………6 1.4 Research Questions to be addressed…………………………………………6 1.5 Relevant Research texts………………………………………………………6 1.6 Brief review of the literature………………………………………………….7 1.7 Paradigm guiding assumptions to be adopted………………………………..10 2.0 Research Design and Methodological procedures………………………………………13 2.1 Research method…………………………………………………………………13 2.2 Research strategy…………………………………………………………………14 2.3 Data type collection and source…………………………………………………14 2.4 Data analysis, interpretation and presentation……………………………………15 2.5 Sampling of participants…………………………………………………………16 2.6 Ethical issues…………………………………………………………………….17 References………………………………………………………………………………….. 19 Executive Summary Internet and economic growth has become one of the best economic analyses of the present. According to Barfield (2003), the Internet is changing the way we work, socialize, create and share information, and organize the flow of people, ideas, and things around the globe. Yet the magnitude of this transformation is still underappreciated. In China for instance, the e-business trading index (volume) of China, by 2009, had reached contributed to 11.1% of the China’s Gross Domestic Product (GDP). In major economies such as China, United States, U.K, and others, the Internet accounted for 21 percent of the GDP growth in mature economies over the past 5 years (Welfens, 2002). In that time, we went from a few thousand students accessing Facebook to more than 800 million users around the world, including many leading firms, who regularly update their pages and share content. While large enterprises and national economies have reaped major benefits from this technological revolution, individual consumers and small, upstart entrepreneurs have been some of the greatest beneficiaries from the Internet’s empowering influence. If Internet were a sector, it would have a greater weight in GDP than agriculture or utilities. The relevance of linking the electronic commerce with the economic growth will be proving very influential in this study and by employing the relevant statistical applications of data analysis, representations and content analysis; this paper intends to critically examine the internet effects to the economic growth and prosperity, with a close examination of the Chinese economy. Introduction Information is power and therefore its availability is what determines advancement in different sectors of any economy. The technological advancement and innovations in the world has boosted many economies in many perspectives. Internet is one of the greatest innovations of the world in the 20th century which has continuously changed life style and people’s working methods in terms of economic, social, cultural, and political perspective. It is thus one of the emerging information and communication technological applications that have continuously changed the world. Internet has penetrated the economies of both the developing and the developed world and has greatly contributed to their national economies. In the today’s advanced business world (marketing), consumers have become increasingly demanding considering that they not only want high quality products but also demand (expect) high quality customer services. In order to stay on course, delivering high quality products to the customers is an ongoing concern to managers. Consolidating their management skills and strategies to satisfy their customers’ needs, certain gaps exist occurs in organizations in the process of providing quality services (Welfens, 2002). In the same way, all other sectors of the economy, such as education, agriculture, leisure (entertainment and sports), and other sector functions of the economies like that of China largely depend on internet. This research seek to examine the effects that internet have on the growth and development of any economy in the present world. Considering that information technology is becoming applicable almost in every sector of the economy, this paper will use statistical methods to gather relevant information from different sources in order to comprehensively come up with some of the impacts of internet on economic growth. Though emphasis will be on the structured methods, the research purposes to adopt the independence research strategy so as to be in a position to uncover more rooted effects that might not have been foreseen by the concerned ministries when making relevant Information Technology policies, relevant financial projections and forecasting with reference to internet and economic growth (Kogut, 2004). Aside from the introduction which has the background information, research problem, objective of the study, significance or justification of the study, the rest of the paper shall dwell on literature review, theoretical framework and the intended methodology. Research problem As stated above in the introduction, businesses around the world and especially in China that uses internet-support advertisements have a great multipliers effect to the Chinese economy and the society. Internet support and adds millions of jobs as many people are employed through the internet. More than that, millions of Chinese spend valuable time in the internet and contribute highly to the overall GDP. However, the recent internet censorship has been economically viewed as a threat to the progress that had been witnessed in China’s economy over the last decades. As a world big economy, China cannot afford to limit the internet usage as this would prevent the country from closing the middle income gap. The reality is that economically, internet has triggered efficient productivity and growth, considering many technological firms established in China. In this case therefore, internet has the power to determine economic outcome and outbursts. According to Kahin, & Varian, (2000), internet has the power to determine the outcome of people, countries, and the entire world. Kehal, & Singh, (2004) also argues that open internet encourages innovations and entrepreneurships that can help solve the economic problems like unemployment. The Chinese government to limit internet usage and maintain power over the citizen may threaten the economic power of the great nation that has threatened the United States in the world trade in an increasing technological world. The move would automatically affect the e-business and other corporate sectors that depend highly on internet, and trickle down to the economy. The purpose of this paper is therefore to examine the impacts that internet economy has played in the economy of China. The paper also looks at the effects of the internet limitations by the government, both in the long and long term perspective to the Chinese economy. Purpose of the Study The study purposes to do a rooted analysis of the effects that internet has on economic growth, as cased with the Chinese economy. Economically, the study will purpose to outline some of the effects of the internet limitations by the government, both in the long and long term perspective to the Chinese economy. In doing this, the study will focus on economic prospects and implications, especially to the e-business and issues, population affected internet and the general economy with its relationship with the internet (information technology). The study will also seeks to determine the importance of utilizing qualitative with combination of quantitative techniques of study so as effectively address the topic. Research Questions to be addressed In line with the objectives and the purpose of the study, this research will try to answer some of the internet-economy related issues that explain why information technology is an important component of the economy. One of the primary objective of this research will be to examine the effects that internet has on the affairs of any economy in the world. More specifically, the research will depend on a case study of Chinese economy, in order to try to answer and address the following research questions: i. How do internet and more specifically information technology affect economic growth and prosperity? ii. Can the internet impacts on economic growth be quantified as a component of information technology and also with its impacts to the economy of a country like china? iii. What are the effects that internet limitations would have to the economic growth and development of a country like China? iv. To what extent do businesses depend on the internet? v. the consequences to businesses in the events that internet is interrupted vi. Are the relationships that exist between advertising-supported internet and innovation, entrepreneurship, and productivity positive or negative? vii. Is there a correlation between social networks (easy connections) and transformations of social life facilitations as well as political dimension of economy? Review of the Literature The review of literature in the study will include the general and specific review of literature. The general literature shall review existing literature that relates to the possible impacts that internet economy has played in the economies like that of China. The specific literature review shall concentrate more specifically on available information on the relationship between internet and economic growth and prosperity. It will also intertwine the economic precepts and theories and relate the components of economy such as GDP and internet together. While examining the specific literature review, the study will identify the gaps which it seeks to fill in the existing literature. The world businesses that are supported by the internet have incredible multiplier effects to the economy. Large economies like that of China do exceedingly depend on the advertisement-supported internet through process of efficient production and sustainability. According to Assandri,et.al. (p 245), the internet supports more than 2 additional jobs everywhere in the economy a figure representing an approximate percentage of 4 percent. The use of internet has helped many businesses to achieve their commercialization goals due to the fact that internet has been preserved as medium of free publishing as well as communications. Through the internet, people find information from the available search engines, a great number of people look up for news, while others do online payment, look for weather, product and service research buying the actual purchase, brand website, checking the paid bills, price comparisons ,as well as audio (or video) clips. Notably, through internet, the social networks have become very important aspects of modern human life because through easy connections that the internet provides, the social lives of people are easily facilitated. As stated by Kehal, & Singh, (2004), within a short time, customers are able to access their intended information about a product or service along with a speedier and convenient transaction. In this case therefore, the easy connection facilitated by the internet and the social networks are the basis of transformative life and increase the productivity of the larger economy (Barfield, p25-9). Other than the social aspects of the internet, internet can also be economically quantified by considering the value that it offers to the economy at large. According to Blaug & Vane, (2003), internet has great impact on the employment value of many economies. A perfect illustration is where through the internet, millions of people (about 2 million Chinese) are employed either directly or indirectly in the process of build and maintaining infrastructure, facilitation of the internet use, conducting advertising and commercial purposes. Their payments add to the total wages, for about some proportionate percentage of the Chinese Gross Domestic Product. More than that, internet effects can be determined in terms of the time valuation of the internet. As stated by Kehal, & Singh, (2004), many people spend valuable time in the internet, whether they are at work or during their leisure time. In China to be specific, the monthly averages of internet usage range to 70 hours, leading to a converse valuation of the time to over 1000 Billions of RMB. This figure greatly boosts the economy of China as important resource. The economic value of internet can also be examined, according to Blaug, & Vane (2003), in terms of the payment valuation. Internet economy provides a direct economic value to the rest of the Chinese economy at some estimated billions of RMB, from the advertisement services, retail transactions, and direct payments to internet service providers. More than that, internet has an indirect generation effects of economic activities that normally take place somewhere in the economy. In this case therefore, its multiplier effects marginally create billions of annual valuations to the economy of China. Many studies have identified some of the effects of the internet on economic growth and prosperity. Through the analysis of the Chinese economy, growth has been majorly effected through manufacturing sector that directly depends on information technology. They have also identified the key economic issues of internet that has led to economic advancement from the marginal contribution by the internet (e-business). Moreover, many studies have gone ahead to point out there is a positive relationship between internet economy and the economy of a country such as China. However, this study finds it necessary to further analyze the rooted effects and impacts that internet driven economy can have on the overall economy of a country. With close examination of the Chinese economy the research will try to ascertain the magnitude of the effects so as to tell what level of the resources are necessary if need arises to overcome the internet interruptions and other economic challenges. The general literature will provide a foundation for narrowing the review of literature to the China specific. The specific literature will in turn provide a platform to identify the gaps that this study intends to cover through empirical work. Paradigm guiding assumptions to be adopted According to Khun’s (1970), paradigm assumptions are the underlying assumptions that researchers use to illustrate procedures, methods, as well as theoretical points in research articles. The distinctiveness of the paradigms reduces the prospects of mixing the qualitative and quantities assumptions in trying to explain certain issues in research. In line with the intellectual structures upon which the article is based, this report looks into the philosophical paradigm that have been used in social science inquiries, the positivism and post-positivism in order to analyze the research approach of the Adapa & Cooksey (2013)article on the factors affecting consumers’ continued use of Internet Banking in Australia. Quantitative Research Assumptions: The assumptions involving the quantitative analysis of the research will tend to generalize on the facts and causes of the internet effects on the economic growth and prosperity of any economy. The quantitative assumptions in research tend to prove that fact, experience, and situations should be quantifiable and measurable so as to have a clear report on the phenomenon. Arguably, it is logical to validate, generalize and deduce what is measurable since statistical realities are backed by variables that are independent and also dependent on measurable data and experience. Based on these facts, the research will make proper regards and analysis on individual sectors of the economy, and how internet and information technology in general has impacted on the growth trends of such sectors. Taking China as the case study, the research will seek relevance from the various economic sectors that heavily rely on information technology and internet for that matter. Through the hypothetical analysis of the influence of the internet even to macroeconomic factors of the economy, the research will be more discrete in terms of perception, valuation, contribution and usage of internet to such a level where it creates greater impacts to the overall economic growth of an economy like China. Through the aspects of quantitative research and paradigms, Burns, (2000) argues that positivism and beliefs in the benefit of hypothetical-deductive procedures are defended. In this case therefore, this research will try to utilize and summarize some of the models and theories in trying to explain some of the effects that internet has on the economy in terms of growth and development. The research will use various textual analyses to show the positivism and optimism of the hypothetical results of quantitative paradigm. This research will also use the perceived safety, money value issues, social factors, and perceived specialty in the analysis section and quantitative inquiry part of the research so as to assume a superior way of knowing, understanding and predicting human experiences and that the positivistic scientific method rules must be adhered to or the researchers and their findings are disregarded. Qualitative paradigm: Qualitative assumptions are based on subjective realities and that social environments are created from personal analysis and interpretation. In trying to get the content of the qualitative analysis, some assumptions will be made on the research study. For instance, by deducing that, understanding value perceptions from the information technology and internet perspective is relevant for managing and supporting both economic growth and development in China, as well as helping in value creation processes in the major development sectors of any economy, the research will try to gain more qualitative ground in order to make the study relevant. The textual components in this case will be made to be based on the constructivism rather than positivism, a clear component of qualitative paradigm. Mixed research paradigm: Through content analysis of the research outcome, this paper will centrally focus on the Chinese qualitative case analysis. However, the analysis that needs numerical analysis of information in order to make viable and reliable numerical deductions will rely on the quantitative analysis. Both the qualitative and quantitative assumptions will be employed in order to make the analysis of the effects of internet to economic growth be more understandable and relevant to the given theories behind internet and impacts of information technology in the world. In the methodology section, the research will employ statistical strategic designs in order to analyze the data, especially pertaining to the perception, safety, technological factors, social factors, demographic factors, channel, and the value for money factors in order to make statistical analysis of their impacts from the internet perspective. By using statistical influence of one or more variables so as to create a correlation relationship between two or more variables, the research will use a mixed assumption approach. In this case, some qualitative assumptions will be used to explain the quantitative assumptions while the observable paradigm in perception will ignite the qualitative and quantitative component of the reality backing up such assertion. Research Methodological procedures and Design It is fact that internet has played critical roles to the economic system of many countries. In the evaluation process of this fact, empirical analysis is very important whereby a country’s Gross Domestic product and some of the statistically relevant data on the internet facts in that country are to be analyzed. This research as stated above, will take a case study of the Chinese economy. The research data to be analyzed in this case are mostly from the reports of the CNNIC (the China Internet Networks Information Center) and the National Bureau of Statistics of China (the NBS). Relevant infrastructural features of the e-business that reflect the direct effects of e-business and networks such as age structures, education, and income structures are to be compared with the corresponding economic implications. The economy of China is generally in most cases represented by the Gross Domestic Product (the GDP) and the relationship between that GDP and the internet is analyzed through examining the internet penetration indices and the annual GDP. The data that would represent the internet economy are represented by the internet penetration in this paper. In the same way, the direct relationship between the GDP of China and the e-business (internet economy) are studied empirically through the analysis of the yearly GDP and the internet indices. Research methods The main research method that this study will adapt is the case study techniques, whereby the economic growth and its relationship with internet will be analyzed based on a case study pack of China. In this regard, the study will be a cross sectional research (survey) which is to be used to gather information on a population at a single point in time (Babbie, 1973). This is a study seeking to explore and determine the effects of the internet to economic growth and prosperity and connects the effects the relationship between the China’s GDP and some statistical data related to internet penetration in China in a specific period of time thus, besides surveys techniques; it seeks to utilize some of the exploratory techniques of research since less literature exists with respect to impact of the internet to the economy of the People’s Republic of China. Analytical techniques of research will be used in order to assess the relative magnitude of the economic effects through internet and other e-business implications that necessitates the use of internet. Accordingly the study methods mentioned above are to be adopted so that a higher depth of the study is achieved and also to ensure that the possible limitations to the study are minimized. Research strategies The independence strategy will be adopted so as to enable the study extract and analyze variables that may not have been envisaged at the initial stage of the research. The logic strategy will however be adapted to aid in the formation of conclusion about the objects and the topic of study based on the data collected and review of literature. In this case, the independent variable is the economic growth as represented by the Gross Domestic Product (GDP) while the dependent variables under investigation are the other underlying internet factors or issues such as the internet penetration, rapid development of the e-business in (taking China as an example), and specific impacts of the internet to the economy. Design of the study This study will assume a case research design on the study of effects of the internet to economic growth and prosperity in terms of the GDP. In this case, some statistical data related to internet penetration in China between 2003 and 2013 will be very relevant. The research will utilize both qualitative and quantitative research techniques in order to minimize the limitations or constraints that may face the study. Qualitative research techniques will be used to review the qualitative data and literature on the topic of study. Information from economic theories, precepts and modeled materials and issues will be qualitatively reviewed. These materials will include magazines, text books, journal articles and other relevant scholarly material from libraries and archives. The quantitative techniques however were deliberately introduced to address specific research questions and specific objectives of the study. These techniques will involve descriptive statistical measures like measures of central tendency on the variables i.e. persistence increase of squatters and others, measures of dispersion e.g. standard deviations and more importantly measures of relationships e.g. the regression. Data type, source, analysis, interpretation and presentation The research seeks to utilize secondary data from where the qualitative and quantitative data is to be extracted for analysis and formation of credible conclusion on the research objectives and topic of study. Secondary data shall be extensively collected from both soft and hard copies of text books containing information on environment. Empirical information shall also be collected from journal articles and other scholarly materials. Qualitative data shall be analyzed by way of content analysis while quantitative data shall be fed into SPSS so as to effectively extract measures consistent with the objectives and topic of study. Interpretation and presentation based on the objects and topic of study shall respectively follow thereof. Based on the study design adopted, this study encounters two types or sets of data to be analyzed; the qualitative and quantitative data. The data is to be analyzed therefore through qualitative data analysis and quantitative data analysis. Qualitative data analysis involves intensive content analysis and review of literature. Quantitative data analysis on the other hand involves examination of trends determining of measures of dispersion i.e. standard deviation, variance and others, measures of central tendency i.e. the mean, mode and median and lastly measures of dispersion which will include regression, and correlation analysis. Pie charts and graphs are also to be used for presentation purposes and also to be used to assess the threshold of theoretical and the practical economic facts and implications of the internet economy to this country China. The interpretation of the results after the data analysis is to address the research purpose, objectives and topic of study. Under this, both the results obtained from qualitative and quantitative data analysis shall be utilized in the interpretation. The results are then to be presented in form of reports, tables, charts, illustrations and other forms of presentations that will be deemed necessary after the interpretation of the results of the research. During the presentation the conclusions and possible recommendations will also be outlined. The presentation of the results also shall ensure adherence to the objectives of the study, specific research questions and the topic of study. Sampling of participants The sampling technique to be adopted by the study will directly depend on the amount of data that will be used to uncover the rooted effects of the internet on economic growth and prosperity. In this case therefore, within the random sampling technique, the participants will be determined from stratification of the expected population. Taking the active sector of the economy of China, certain ministries and key corporate sectors will be used in trying to extract the relevant information. From the relevant key ministries and sectors (stratum), 100 people will be interviewed on their take on the internet. Relevant information will be asked from the stated authorities relating to these sectors’ dependent on the internet and information technology in dissemination of data. Ethical issues Taking into consideration of the risks involved, the research will be conducted within the ethical frame work of research. Matters that are confidential shall remain confidential, and within the spectrum of extracting data from individuals, there will be no disclosure of information that is not intended to be disclosed. The basic principles of research ethics such as having informed consent, giving no pressure on individuals to participate, respect of individual autonomy, no causing harm, maintaining anonymity and confidentiality, will be well adhered to at all costs. References Barfield, C. E. (2003). Internet, economic growth and globalization: Perspectives on the New Economy in Europe, Japan and the USA. Berlin [u.a.: Springer. Barfield, Claude E. (2003). Internet, Economic Growth and Globalization: Perspectives on the New Economy in Europe, Japan and the Usa. Berlin [u.a.: Springer,. Print. Blaug, M., & Vane, H. R. (2003). Who's who in economics. Cheltenham, UK: Edward Elgar Pub. Helpman, E. (1998). General purpose technologies and economic growth. Cambridge, Mass. [u.a.: MIT Press. IFIP TC6/WG6.4 Workshop on Internet Technologies, Applications, and Societal Impact, Cellary, W., Iyengar, A., & IFIP Working Group 6.4. (2002). 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(2003) Towards a Knowledge-Based Economy: East Asia's Changing Industrial Geography. Tokyo [u.a.: Nomura Research Institute [u.a.,. Print. Organisation for Economic Co-operation and Development. (2012). OECD internet economy outlook 2012. Paris: OECD. Sun, Helen. Internet Policy in China: A Field Study of Internet Cafés. Lanham, Md: Lexington Books, 2011. Internet resource. The Chinese Economy: Recent Trends and Policy Issues. Berlin: Springer Berlin, 2012. Print. The new economy and economic growth in Europe and the US: With 59 tables. (2002). Berlin [u.a.: Springer. Welfens, P. J. J. (2002). Interneteconomics.net: Macroeconomics, deregulation, and innovation. Berlin: Springer. Read More