Recent analysis defines 50 percent Internet usage by population as a tipping point for economic growth among developing countries.
The United Nations International Telecommunications Union recently announced that by 2014 there will be nearly three billion Internet users. Shortly thereafter, on May 17, at the World Telecommunication and Information Society Day (WTISD) the UN discussed the digital divide—the technology gap that increases economic disparity making growth and competition on a global scale more difficult for developing nations.
Broadband connectivity is a hugely important tool in reaching the three pillars of sustainable development in nations: economic growth, social inclusion, and environmental balance. While most countries are
Of the countries for which we have data, 84 countries have already reached the 50 percent threshold and at current rates, 48 will make the jump within five years.
The populations of Bolivia, Bhutan, Cape Verde, Fiji, Equatorial Guinea, Iran, Mexico, Nepal, Panama, Ukraine, and Vietnam could all reach 50 percent Internet users this year. Watch for signs of economic growth from these countries in the coming years.
Identifying the Divide
According to a study by the ITU, only 32.4 percent of the population in developing nations has accessed the Internet in the last three months. The study also showed growth in the number of Internet users in the developing world at a rate of 19.1 percent in 2014.
This rapid growth rate is encouraging, but in order to actually quantify and visualize the economic digital divide, we compared Internet users as measured by the ITU study with per capita GDP from World Bank estimates in the same year.
The data above shows a clear logarithmic curve. With the exception of Equatorial Guinea, every country with less than 50 percent of its population using the Internet has a GDP per capita lower than $12,000.
Finding the significance of a 50 percent threshold reinforces the findings of a 2009 analysis by Dr. Pantelis Koutroumpis. Both our data and Koutroumpis’s shows 50 percent usage by population as the point where the Internet actually begins to help the economy.
Intuitively, we can surmise that if only a small percentage of a country’s population has Internet access, then networking capabilities are still too limited to drive change. Now we have some evidence as to at what percentage that begins to change.
Countries must reach a critical mass of online buyers and sellers in order to drive economic growth. We define this critical mass of 50 percent Internet usage as the economic digital divide.
Bridging the Divide
With the support of the UN, government efforts to increase broadband penetration, and non-profit’s like A4AI and Internet.org, the developing world is crossing the economic digital divide at a rapid rate. Still, nearly 60 percent of the global population has no Internet access. Our numbers show 37 countries still over five years away from reaching the 50 percent threshold for Internet users by population. At their current Internet user growth rate, Rwanda and Somalia both have over 75 years before reaching the 50 percent threshold.
Identifying the Economic Digital Divide gives organizations working to improve broadband access in developing countries a target. They can use this information to show how much work still needs to be done. They can use it show the need for more funding, more support, and more involvement. Most importantly, they can use this information to show people that success is possible if they increase their efforts.
Predicting the Divide
To estimate when current countries can expect to cross the digital divide, we looked at the latest available Internet user data from 2012 and the average growth rate for the last three years to predict how many years developing countries will need before they reach the 50 percent Internet users threshold.
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