The internet economy is a vast and complex ecosystem, and any disruption to the internet can have a significant impact on revenue. This is because the internet is used for a wide range of activities that generate revenue.
The shutdown can disrupt supply chains, making it difficult for businesses to get the products they need to sell. It can also make it difficult for businesses to communicate with customers, which can lead to lost sales.
There are critical sectors runs only on the Internet:
E-commerce: Shutdowns halt e-commerce, generate losses in time-sensitive transactions, increase unemployment, interrupt business-customer communications, and create financial and reputational risks for companies. Secondly, Online advertising: A shutdown of the internet would prevent these businesses from generating revenue. As the businesses creates digital content and distribute digital content, such as movies, music, and games, rely on the internet to distribute their content. A shutdown of the internet would prevent these businesses from generating revenue.
The report says, the shutdowns also led to a loss of nearly USD 118 million in foreign investment and triggered over 21,000 job losses, the global non-profit Internet Society said in its report 'Netloss'. Internet shutdowns by law enforcement agencies like the one in Manipur and Punjab cost USD 1.9 billion to the Indian economy in the first half of 2023.
The non-profit arrived at the financial impact of the shutdown going beyond the loss of output and included factors like change in the unemployment rate, Foreign Direct Investment (FDI) lost, risks of future shutdowns, population in the working age etc.
Governments often mistakenly believe that internet shutdowns will quell unrest, stop the spread of misinformation, or reduce harm from cybersecurity threats. But shutdowns are extremely disruptive to economic activity, the report said.
India's regular use of shutdowns as a tool to maintain public order gives India a shutdown risk of 16 per cent so far this year, one of the highest in the world as of 2023, it said.
The global rise in internet shutdowns shows that governments continue to ignore the negative consequences of undermining the open, accessible, and secure nature of the global internet, Internet Society spokesperson said.
