May 30, 2016Michael Sutherland-Shaw
Hopefully to the surprise of no one, the Internet is more than just a way to watch funny cat videos, connect with friends and stay up to date on the latest news.
The Internet is a tool for change.
According to a new study by Strategy&, PwC’s strategy consulting business, global inclusion in the Internet could lift 500 million people, about seven percent of the world’s population out of poverty.
For 10 years researchers have looked at how the Internet could change as more people from developing markets get online. The study, prepared for Facebook, also examined how barriers to accessing the Internet could be removed.
“We need to find new approaches in the markets for connectivity, content, and retail if we are to harness the power of the Internet for development and poverty reduction,” said Andrew Bocking, Product Manager for Internet.org at Facebook.
The number of new Internet subscribers, most of whom are in developing nations, has slowed in recent years, only growing single digits since 2013. According to the report, this leaves 4.1 billion people disconnected from a modern economy that would benefit by over US $6 trillion with their participation.
The report, “Connecting the world”, suggests global Internet inclusion would mean there could be five Internet users in developing markets for every one user in developed markets, compared to the current ratio of two to one.
However, before we get to this point, a number of factors must change in regards to Internet access, including price (retail Internet prices need to fall nearly 70%), according to the report.
“To allow people in the developing world to participate fully in the modern economy and benefit from the Internet’s transformative impact, we need to make Internet access easier and cheaper, provide people with compelling reasons to go online, and support people as they discover the Internet and use it for the first time,” said Bahjat El-Darwiche, co-author of the Strategy& study and a partner with PwC Middle East.
The report also outlined a number of actions that would help bring more people online:
- Replacing current 2G networks with 3G or 4GLTE could bring a 60-70% reduction in the cost per MB to serve developing markets, making it profitable for operators to provide internet services, and opening up the Internet to more than two billion people.
- Providing content through a series of local high speed networks, would make it affordable for a further 300 million people.
- Offline distribution of content, including through national and regional data exchanges would improve access and affordability for a further 170 million people
- Governments offering content focused on education, social services or business opportunities could create an incentive for a further 200 million to go online
- Brand or subscriber subsidized access, for example learning centers, could bring another 500 million online globally
For Mathias Herzog, Strategy& report co-author and principal with PwC US, “the inclusive Internet of the future will be different from today’s Internet. “It will be linguistically, culturally, and economically more adapted to the needs of the previously unconnected, and it will be the primary channel for the provision of critical services to those most marginalized in today’s physical economy.”