Global Internet inclusion could lift 500 million out of poverty, and add over $6trn to global GDP

Global inclusion in the Internet could bring seven percent of the world’s population - 500 million people – above absolute poverty levels, and add US$6.7 trillion to global economic output, according to a study released by Strategy&, PwC’s strategy consulting business.

The study, for Facebook, encompassed 120 countries over a 10-year period and describes how the Internet could change as more people from developing markets get online. It examines how barriers to accessing the Internet could be removed, and how the Internet could change as more people from developing markets get online.

Despite the ongoing digital revolution, the number of new Internet subscribers, most of whom are in developing nations, has slowed in recent years, only growing in single digits since 2013. This leaves 4.1 billion people disconnected from a modern economy that would benefit by over US$6 trillion with their participation.

According to the report ‘Connecting to the World’, global Internet inclusion would mean that 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.

Bringing the whole world online would create huge benefits for developing countries and for businesses over the coming five years, including:

Social and economic improvement for over 4 billion people
An additional global economic output of US$6.7 trillion
A $400 billion growth opportunity for telecom operators
A $200 billion opportunity for content providers

Liesbeth Botha, Strategic Digital Transformation Leader, PwC Africa, says: “Bringing the world online is a significant challenge. Access to the Internet needs to be made more affordable and efficient, in particular in developing and emerging markets. Currently, there are a number of barriers to Internet access that arise from severe barriers to access and usage in the telecom, content and retail markets. We need to develop new mechanisms so that the markets for connectivity and content creation can remove these barriers to digital inclusion.”

Progress has been slow due to barriers including the cost of coverage, existing infrastructure speed and capacity, and the need to implement new infrastructure where it does not exist. The study finds that with retail Internet prices needing to fall nearly 70 percent to make the Internet affordable to 80 percent of the population, action is required across key areas of connectivity, content and the retail service to bring more people online:

Replacing current 2G networks with 3G or 4GLTE could bring a 60 – 70% reduction in the cost MB to serve developing markets, making it profitable for operators to provide internet services, and opening up the Internet to over 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 172 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 centres, could bring another 500 million online globally.

“As more people from developing markets use online resources, the nature of the Internet will significantly change,” says Botha. According to the report there could be five Internet users online in developing markets for every user in developed markets, compared to the current ratio of two to one. Internet users in the developing world will seek more content related to education, economic opportunity, and social needs. They are also likely to download entertainment from Wi-Fi hotspots or other technologies, and consumer it offline.

Researching the world’s remotest and poorest inhabitants will require using innovative and disruptive technologies. “We need to find new approaches in the market for connectivity, content and retail if we are to harness the power of the Internet for development and poverty reduction,” says Andrew Bocking, Product Manager for Internet.org at Facebook.