Friday, July 31, 2009

Growing the Internet Market : What's the Big Deal ??

The economies of the last century were driven by railway connections, the economies of today are largely driven by the Internet and other ICT (Information and Communication Technology) links.”

– President Mwai Kibaki of Kenya, speaking a few days ago at the laying of East Africa’s first broadband cable line, connecting this region to Europe and India.

Why the big fuss about maximizing Internet users and usage? After all, among developing nations like India or Kenya, there are other areas for development e.g. roads, electricity, schools, hospitals and telecom. Which is true. All I wish is that Internet should figure actively among these top development priorities.

The Net is not just email, search, shopping, dating, social networking, portals, advertising revenues, IPOs and the like, or a poor investment, which at times the media has made it out to be.

It is now society’s most powerful tool for 'advancement'.


A. During my travels around the country (more a few years ago than now, I admit) trying to popularize the Internet, I have found the desire to use the Net the keenest among the disadvantaged sections of society e.g. I found teenaged girls in small town Uttar Pradesh to be avid visitors of cybercafés.

B. Politically suppressed Iran now has more avid tweeters than perhaps most countries; Twitter has kept the ferment for reform in Iran, alive.

C. In China, which at 338 million users and counting is the world’s biggest Internet market, there is widespread usage of news and blogging. 79% of all Net users use it for News: this is the second most used Net application, behind music which has 84% users.

And there are more bloggers by far in China than in any other country, with 54% of all Net users i.e. 162 million blogging!

And China is still witnessing an explosive growth in Net users. Here is the latest available report.

It would appear that in a country with acute news censorship and propaganda, the Internet plays a major role. Media such as China Central Television (and I would imagine radio and press) are State controlled monopolies. Individuals can best inform themselves and voice themselves via the Net? Do we dare predict that it is the Internet that will one day willy nilly catalyze political change in the world’s largest non-democracy.

D. In Kenya, the laying of the new broadband link (see pic above) will, it is said, open up the door for it - and for other neighbouring countries - to join the BPO boom , creating jobs in economies which sorely needed (and posing competition to India’s call centre industry).

E. The Government of India has announced, in this year’s Union Budget, the setting up of an online employment exchange. India has just 8 million organized sector jobs, most people are in the unorganized sector.

F. Another recent announcement - that did not get sufficient attention - is the government’s intention to provide Internet marketing support to the country’s micro, small & medium enterprises sector. There are estimated to be 13 million such units, they employ 42 million people and account for 45% of the country’s industrial output. Online marketing can help them significantly, some players have been at it already, but there is much that can be done.

G. ITC’s E-choupal has placed 6,500 Internet kiosks across 40,000 villages, benefiting a potential 4 million farmers. These give information on crop prices, access to markets, weather patterns and farming knowhow, leading to improvements among small and marginal farmers - that would have been otherwise impossible. This is the world’s largest ‘rural digital infrastructure’, says the company.

Then there are other companies that have installed rural Internet kiosks for other (non-agri) purposes, e.g. Comat for e-governance.

H. This year, for the first time, online application was mandatory to admissions to colleges in Mumbai city. Nearly 200,000 graduating high school students have just submitted their admission applications online.

Till last year, prospective students hopped from college to college to first pick up and then drop by (submit) the applications. At about 5 colleges per applicant and 2 trips per college, this year that’s 2 million trips saved!

That’s the power of the Internet. And that’s what just one (admissions) website can do.

There is a humungous diversity of uses to which the Internet can be put. Agriculture, e-governance, recruitment, outsourcing, small business, college admissions and political change are some of these, as the above random examples show.

An economist would say that the Internet has high ‘social utility’. A rupee of investment here has a high multiplier effect.

See also previous posts on 'Growing the Internet Market' :

An Agenda to Grow the Indian Internet Market

More on an agenda to grow the Indian Internet Market

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