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Role of Internet Penetration in Economic Development 

  • December 2015
  • 49 pages
  • Frost & Sullivan
Report ID: 3506467


Table of Contents

Role of Internet Penetration in Economic Development : How to Prioritize a Collaborative Approach to Bridge the Digital Divide in Emerging Markets?

The information technology and mobile phone revolution is bringing much needed economic change to emerging countries. However, the pace of growth requires rapid acceleration. As of 2014, 60% of the global population did not have access to the Internet—with 56% out of this 60% living in emerging countries. The study examines the need for a collaborative approach between the public sector, private sector, consumers, and non-governmental organizations to achieve an inclusive information society by means of complete commitment to each constituent’s respective role. Successful bridging of the digital divide in a country will have positive effects across different sectors such as education, healthcare, energy, and governance.

Executive Summary

- Frost & Sullivan’s Demography, Education, Energy, Political Will, Knowledge, Innovation, and Collaboration (D.E.E.P-K.I.C) index helps in understanding the need for bridging the digital divide. Based on the D.E.E.P-K.I.C index scores, the countries are divided into five groups and a prescriptive approach has been provided for their Internet-led economic development.

- Increase in Internet penetration can create significant growth in important sectors such as education, healthcare, energy, and governance in an economy. The top countries in each D.E.E.P-K.I.C country group are listed by the sector in which the Internet will produce maximum growth by 2025.

Broadband penetration is directly linked to its cost; this is based on the average family income and the availability of products and services in the commodity basket, which is within the general population’s purchasing ability. As the annual cost of broadband drops below % of a family’s annual income, its use begins to increase dramatically. For the Internet to be affordable to over % of the world, mobile data consumption would need to be limited to MB per month. Also with price reduction, emerging markets will have one billion, new broadband users in the next five years.

In emerging markets, the main drivers of Internet will be the surge of urbanization, growing middle class, increased penetration of smartphones, and increasing mobile Internet adoption. Due to the establishment of basic and affordable voice connectivity, markets with high growth rates are likely to see accelerating consumer demand for data services and Internet access.

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