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New gTLDs Will Create Tens of Thousands of New Jobs

Anyone paying attention to ICANN’s public meetings in Cartagena last month would have quickly become aware of a powerful recurring theme—fear. Despite all the substantial progress that was made on the new generic top-level domains program, and despite the generally optimistic, up-beat tone of the debate, it was ultimately fear that ruled. Specifically, the fear of governments, and their lobbyists in the intellectual property community, that the program may have an overall adverse economic impact. The concern that new gTLDs will prove more costly to brand owners than would be justified by the positive economic benefits created by innovation in the domain name industry led directly to the program being delayed by ICANN’s Board, yet again, for at least a quarter.

But as ICANN CEO Rod Beckstrom and others indicated during the meeting, while it’s extremely easy to be afraid of the potential for unknown futures costs, it’s correspondingly difficult to estimate the value of future innovation. We know that new gTLDs will lead to innovative uses of domain names—both in terms of how they are used, where they are used, and by whom—but it’s very difficult to put a dollar value on that degree of innovation. This problem is compounded by the fact that, until ICANN finally approves the Applicant Guidebook and opens up the door to applicants, we won’t know precisely how applicants intend to use their gTLDs. On the day the applications are published, new business models will almost inevitably be unleashed onto the world.

While the advantages of “innovation” may be difficult to quantify, there are some simple positive economic benefits of new gTLDs that appear to be no-brainers but which do not appear to have been discussed as much in ICANN’s various economic studies and public fora. I’m thinking primarily of job creation. While some representatives on the Governmental Advisory Committee sit and worry about the costs to business of the gTLD program, their superiors back home are for the most part focused on one thing: economic stimulus. Many world leaders have put job creation at the forefront of their strategies for reversing the sluggishness of the global economy. The new gTLD program will help with that goal.

Put simply: new gTLDs will create new jobs.

New gTLDs will require, conservatively, a team of 10 to 20 people each to apply for, manage and operate. With ICANN imposing a ceiling of 1,000 applications per year, that’s 10,000 to 20,000 new jobs created in each year the program runs. These will be, for the most part, well-paid white-collar positions requiring skilled information workers. Companies that do not exist today will come into existence, and they will need employees. Companies that have been treading water since the program was first announced will be able to start hiring.

On the flip-side, nobody is going to lose their job as a result of new gTLDs. No companies are going to go out of business. As Beckstrom noted in Cartagena, if any (US) companies felt new domain names contributed a material risk to their businesses, they would be legally obligated to disclose as much in their regulatory filings; none have. The economic impact of new gTLDs on jobs will be net-positive.

It has been estimated that the typical gTLD application will cost approximately $500,000. With 1,000 gTLDs, that’s a half a billion dollars spent just on applications in just the first round. That money does not disappear into a vacuum, it’s spent on technical consulting, building out new information systems, recruiting attorneys and marketing specialists. Advertising agencies, auction houses, intellectual property consultancies, infrastructure providers, software developers, hardware manufacturers, and other business services will be needed, creating more jobs. The whole support ecosystem will benefit from the launch of the new gTLD program.

During the Cartagena public forum December 9, several new gTLD applicants stood before the microphone to announce that they were ready to start signing checks just as soon as ICANN finally approves the AGB. Elaine Pruis of Minds + Machines used her two minutes to succinctly state, to applause, the views of many: “Innovation lifts people out of poverty. Innovation not only creates jobs. It creates industries. New gTLDs will create jobs, not only for registry operators like myself and registrars but for the increased demand for DNS services.”

ICANN itself will also receive many millions of dollars—in the form of auction proceeds as well as application fees—which it will be able to invest in worthy projects. The AGB currently envisages earmarking funds raised in auctions for, for example, supporting gTLD applications from developing nations, creating registry continuity schemes, or financing security projects that benefit the global Internet community as a whole. However the funds are distributed, they will certainly be reinvested in the community, again potentially creating jobs.

The benefit to developing nations and under-served communities is not a trivial one. While the program is held up in ICANN by powerful corporate interests in North America and Europe, the economic benefits of new gTLDs are being delaying in regions such as Asia and Africa, especially in locations that would be best served by internationalized domain names (IDNs). The surprisingly successful launch of the latest IDN ccTLD, in Russia, recently has proved that new TLDs, as well as given a voice to those disenfranchised by a quarter-century of a Latin-only DNS, can create unexpected economic benefits. There’s no reason that these benefits should be restricted to the ccTLD market by more delays to the gTLD program.

This article is not meant to suggest, of course, the new gTLDs are going to solve the global economic crisis. Nor is it meant as a blanket endorsement of theories of trickle-down economics. But ICANN is in the very real position, right now, to make a small but meaningful contribution to job creation and thus the recovery, without the need for any government spending whatsoever. When you put aside all the speculation about the possible benefits of innovation, a simple fact remains: new gTLDs will need workers, and when workers are needed, jobs are created.

By Johnny Du, VP, StableTone Ltd

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Typical .dot thinking? Marcel Doe  –  Jan 6, 2011 12:06 PM

Your reasoning seems the typical .com bubble talk: making money out of air. To me a gTLD is just a short string of characters in a database. The fact that it requires a large organization, lots of bureaucracy and creates dollar signs in the eyes of many entrepreneurs does not make it good. It just moves money around (towards you?). I think if I follow your reasoning, snow is also good for the economy, as it doesn’t cost anything, but requires a lot of manpower, jobs, to clean up roads, airports, etc.

Disclaimer: I’m a software engineer, not an economist.

Thanks for the comments! I'm glad you Johnny Du  –  Jan 6, 2011 3:13 PM

Thanks for the comments! I’m glad you mentioned .com bubble. Without it, do you think we could have companies such as Yahoo, Google, Amazon, Ebay, Baidu, etc? Have you tried .tel? do you think it is just a short string of characters in a database?

I’m not an economist either. But I know snow is a necessary part of the planet. I don’t like snowstorm. But I do go skiing occasionally and enjoy it very much.

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