ASIA
08 October 2014
Most Asians still don't use the Internet
Internet usage is growing rapidly in Asia. But more than half of Asia's 4 billion+ population still do not yet use the Internet, according to recent McKinsey study.
One of our typical images of Asia is that of a tech-savvy young population of Internauts who are developing and moving faster than the rest of the world.
This is indeed one reality of today's Asia, especially in Korea, Singapore and Japan. Internet adoption is accelerating in Asia with the expansion of mobile network coverage and increasing mobile Internet adoption, urbanization, shrinking prices for devices and data-plans, growing middle class, and the increasing utility of the Internet.
But the overall reality is that more than half of Asia's 4+ billion citizens still do not use the Internet, according to a recent McKinsey study.
Some 85% of India's population of 1.3 billion do not use the Internet, despite all the hype of high-tech India. In China, the much vaunted emerging great power, 54% of the population of 1.4 billion are not online. And in Southeast Asia's leading country of Indonesia, 84% of its population are also not online. The situation is fairly similar in other populous Asian countries like Pakistan, Bangladesh, the Philippines, Myanmar, Vietnam, and Thailand.
By contrast, Germany, Japan, Korea and the US each have Internet penetration rates between 84 and 86%.
Not surprisingly, the offline population is disproportionately rural, low income, elderly, illiterate and female. Looking more deeply at the issue, McKinsey identified four main factors behind the low Internet usage in Asia.
First, there are incentives, like a lack of awareness in or cultural acceptance of the Internet. Then there is the effect of low incomes and affordability, which is the main barrier to Internet usage. A lack of user capability, due to low digital literacy is the third factor. And inadequate infrastructure, notably for mobile Internet coverage or network access, and electricity, is the last factor.
Korea and Japan are estimated to have among the lowest barriers in the world, just behind the top performers of the US and Germany, based on a composite Internet Barriers Index.
China, Sri Lanka and Vietnam face "medium barriers", with the greatest challenge being incentives. India, Indonesia, the Philippines and Thailand have medium to high barriers. While Bangladesh, and Pakistan face high barriers across the board.
The hurdles that developing Asia faces in getting online are too numerous to detail, so we mention just a few examples.
In India, nearly 1 billion people still cannot afford the cheapest mobile data plans. Literacy rates are particularly low in Bangladesh, India and Pakistan, especially for women. And women suffer from a vast array of discriminations in Asia, especially in South Asia.
Literacy rates are above 90% in Indonesia and the Philippines, but their schools lack the resources to invest in technology. And while access to technology and the Internet is available in the workplace, Indonesia and the Philippines are again hindered by high rates of youth unemployment.
One survey of Chinese consumers found that about 60% of the offline population cited a lack of knowledge of how to use a computer as the primary reason for not accessing the Internet. Electrification is poor in many countries. About 70% of the mobile connections in India and China are on 2G networks, with potentially limited mobile Internet capabilities. With the exception of China, the majority of Internet content and services consumed in Asia's developing countries originates from outside the country. This means that foreign language capability, rare in many countries, is necessary to use the Internet.
This granular analysis of Internet usage in Asia is extremely important. The Internet is the fundamental technology for modern life. It can provide citizens with education, entertainment, social connections, e-government services, awareness of world and local events, and transparency about the activities of government, business and society.
Thanks to the Internet, consumers can enjoy variety, and time and cost savings. And business benefit greatly from the Internet for global operations management, customer management, and analyzing and accessing new markets. Government can deliver and manage public services through the Internet, which can also facilitate policy analysis and implementation.
In short, the Internet is transforming the very nature of our economies and society, with profound impacts on GDP growth. And most of the content, services and benefits are freely available!
But while the digitalization of the economy and society is now racing ahead in the West, in Asia and many other parts of the developing world, it is lagging behind. A deep digital divide exists within most Asian societies, and also between East Asia and the rest of the region.
It is imperative for emerging Asian governments to improve education, Internet infrastructure and the competitiveness of Internet services, and remove barriers to Internet access. Otherwise the voices, ideas and contributions of the offline population will continue not be heard or even made. This is detrimental, not just to Asia, but to the whole world.
Executive Director
Asian Century Institute
This is indeed one reality of today's Asia, especially in Korea, Singapore and Japan. Internet adoption is accelerating in Asia with the expansion of mobile network coverage and increasing mobile Internet adoption, urbanization, shrinking prices for devices and data-plans, growing middle class, and the increasing utility of the Internet.
But the overall reality is that more than half of Asia's 4+ billion citizens still do not use the Internet, according to a recent McKinsey study.
Some 85% of India's population of 1.3 billion do not use the Internet, despite all the hype of high-tech India. In China, the much vaunted emerging great power, 54% of the population of 1.4 billion are not online. And in Southeast Asia's leading country of Indonesia, 84% of its population are also not online. The situation is fairly similar in other populous Asian countries like Pakistan, Bangladesh, the Philippines, Myanmar, Vietnam, and Thailand.
By contrast, Germany, Japan, Korea and the US each have Internet penetration rates between 84 and 86%.
Not surprisingly, the offline population is disproportionately rural, low income, elderly, illiterate and female. Looking more deeply at the issue, McKinsey identified four main factors behind the low Internet usage in Asia.
First, there are incentives, like a lack of awareness in or cultural acceptance of the Internet. Then there is the effect of low incomes and affordability, which is the main barrier to Internet usage. A lack of user capability, due to low digital literacy is the third factor. And inadequate infrastructure, notably for mobile Internet coverage or network access, and electricity, is the last factor.
Korea and Japan are estimated to have among the lowest barriers in the world, just behind the top performers of the US and Germany, based on a composite Internet Barriers Index.
China, Sri Lanka and Vietnam face "medium barriers", with the greatest challenge being incentives. India, Indonesia, the Philippines and Thailand have medium to high barriers. While Bangladesh, and Pakistan face high barriers across the board.
The hurdles that developing Asia faces in getting online are too numerous to detail, so we mention just a few examples.
In India, nearly 1 billion people still cannot afford the cheapest mobile data plans. Literacy rates are particularly low in Bangladesh, India and Pakistan, especially for women. And women suffer from a vast array of discriminations in Asia, especially in South Asia.
Literacy rates are above 90% in Indonesia and the Philippines, but their schools lack the resources to invest in technology. And while access to technology and the Internet is available in the workplace, Indonesia and the Philippines are again hindered by high rates of youth unemployment.
One survey of Chinese consumers found that about 60% of the offline population cited a lack of knowledge of how to use a computer as the primary reason for not accessing the Internet. Electrification is poor in many countries. About 70% of the mobile connections in India and China are on 2G networks, with potentially limited mobile Internet capabilities. With the exception of China, the majority of Internet content and services consumed in Asia's developing countries originates from outside the country. This means that foreign language capability, rare in many countries, is necessary to use the Internet.
This granular analysis of Internet usage in Asia is extremely important. The Internet is the fundamental technology for modern life. It can provide citizens with education, entertainment, social connections, e-government services, awareness of world and local events, and transparency about the activities of government, business and society.
Thanks to the Internet, consumers can enjoy variety, and time and cost savings. And business benefit greatly from the Internet for global operations management, customer management, and analyzing and accessing new markets. Government can deliver and manage public services through the Internet, which can also facilitate policy analysis and implementation.
In short, the Internet is transforming the very nature of our economies and society, with profound impacts on GDP growth. And most of the content, services and benefits are freely available!
But while the digitalization of the economy and society is now racing ahead in the West, in Asia and many other parts of the developing world, it is lagging behind. A deep digital divide exists within most Asian societies, and also between East Asia and the rest of the region.
It is imperative for emerging Asian governments to improve education, Internet infrastructure and the competitiveness of Internet services, and remove barriers to Internet access. Otherwise the voices, ideas and contributions of the offline population will continue not be heard or even made. This is detrimental, not just to Asia, but to the whole world.
Author
John WestExecutive Director
Asian Century Institute