Both Internal and external links are important in many ways. They do play a big roll in guiding websites to the content they were looking for, whether it be about a product, a service or anything else.
Internal links can help to increase rankings to other pages within your site. External links are used to indicate that a page is credible to search engines. They are both used by search engines to determine what pages are most authoritative on a given subject.
This is why they are both important when it comes to SEO.
Jeff Riddall has a column on Search Engine Journal that will help us figure out why they matter and how you can use them to enrich the customer or client experience.