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Mary Meeker’s Internet Trends report has become an annual ritual for Silicon Valley. It’s as if the tech industry had an annual physical exam and received a health report in the form of a 355-page presentation.

As in years past, Meeker’s 2017 report contained a few notable trends in its firehose of data points, which are interesting in how they show the tech industry evolving. Here are some of the key takeaways.

Growth in Internet population is slowing, but growth in online ads is accelerating.

The number of global users on the Internet reached 3.4 billion in 2016, equal to 46 percent of the world’s population. That’s more than double the figure in 2009, but the growth rate has flatlined around 10 percent a year for the past five years.

Meanwhile, growth in online advertising is accelerating, at least in the U.S. Digital advertising rose 22 percent to $73 billion last year, up from 20 percent in 2015 and 15 percent in 2014. Unsurprisingly, the growth is coming from mobile ads, which is growing fast enough to more than offset a decline in desktop ads.

Meeker said that the amount of money spent on digital ads will surpass spending on TV ads sometime in the next six months.

Ecommerce growth is also accelerating.

That online-retail sales is growing year after year is a given. But the pace of growth has been accelerating for the past three years, rising steadily from 14 percent in 2013 to 15 percent last year.

Credit Amazon, of course, but Walmart is also seeing new online growth in the wake of its purchase of deep-discount site Jet.com. Meanwhile, physical retailers are expected to close nearly 1,700 shops in the U.S., the largest number in 20 years, the report says. Those closings have more to do with unwise overexpansion in recent years than Amazon or ecommerce in general.

Gaming continues to lead and shape the online experience.

Another unsurprising insight concerns the growth and popularity in gaming, but it’s interesting to see the figures Meeker has collected to show that growth.

Meeker estimates that there are 2.6 billion gamers around the world, up from 100 million in 1995. The gaming industry generated $100 billion in global revenue last year, with nearly half of that, $47 billion, coming from Asia. Games are central to defining the overall online experience. In her presentation, Meeker speculated that they may be preparing society for the rise of human-computer interaction.

Revenue in the music industry is rising again.

The Internet has not been kind to the music recording industry. For the past 16 years, revenue has declined by an average of 4 percent a year. The rate of decline had slowed in the past several years as downloaded and streaming music began to offset the vanishing sales of CDs.

Last year, overall music revenue grew by 11% to more than $12 billion, its highest figure since 2009. Subscription and streaming revenue made up more than half of the total figure for the first time.

Digital health care is approaching an inflection point.

Health care is at once a data-driven industry and one that is perhaps the worst at managing data. Meeker says health care “is at a digital inflection point,” one of those terms that act as red meat for investors because it signals strong growth ahead.

The rise of fitness trackers and health apps are collecting more user data than ever, while hospitals are sharing more health care information with patients. The average hospital holds 50 petabytes of health care data, and the total amount of that data is growing by 48 percent a year, Meeker says.

The bottleneck to analyzing that data is patient privacy. Health care data can be used to the benefit and the detriment of patients. A survey of consumers asking which tech companies they’d share their health data with shows 60 percent trust Google and 56 percent trust Microsoft. Less trusted are Amazon and Facebook — only 39 percent of consumers would share health data with them.

China is growing as a tech rival to the U.S.

The biggest market caps in tech belong to none other than the Big Four: Apple, Alphabet, Amazon, and Facebook. Together, they are worth a collective $2.4 trillion. But seven of the next 16 on the list are Chinese companies like Tencent and Alibaba. Those seven are worth $929 billion in aggregate.

U.S. companies may still dominate the money invested in tech, but China’s rivals are quickly catching up.

Immigrants are core to the Valley’s DNA.

The story of Silicon Valley is in good part the story of immigrants who have played a part in building and shaping its technology. Meeker looked at the 25 most highly valued tech companies and found that 15 of them had founders who were first- or second-generation Americans.

The shift in the Trump Administration’s “America first” stance on work visas may put that in jeopardy. To underscore the importance of foreign workers and founders in tech, Meeker showed that half of the most highly valued private tech companies were founded by first-generation immigrants. Those companies — including Uber, SpaceX, and Slack — have created 48,000 jobs.

The full report can be found here

[slideshare id=76530316&doc=internettrends2017report-170531162415]

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