An Open, Inclusive Internet is a Global Economic Driver

The following is a special post from i2Coalition Policy Director Monica Sanders.

The often told lore of the Internet’s beginnings is alternately that it began with a group of scientists wanting to share information, or that of a couple of university students starting something in a garage with a few wires and many big ideas. People in the Internet infrastructure industry, who build and maintain the support upon which the World Wide Web functions, know this backstory well. As someone with an international background who has been involved in development work, the idea that these reflections have a uniquely North American bent stands out. While inspiring, this depiction of the Internet’s origins and rapid expansion limits the reality of its reach as a global economic driver.

Most people in the world are involved with the Internet in some way. Internet World Stats says that as of December 31st of 2017, 4,156,932,140 people, or 54.4 percent of the world’s population is connected. That reflects 1,052 percent growth since the year 2000. More than half the world’s population is connecting, sharing ideas, selling products and starting new ventures in the digital space. Those opportunities happen irrespective of physical borders or any other limitation.

With this enormous growth has come new entrants into the digital economy, most of which are small businesses and partnerships. The Internet infrastructure industry: data centers, hosting services, cloud providers, registrars, and registries are still made up of many small-to-medium sized enterprises. With some plans and a few “off the shelf” products, almost anyone can set up a hosting or data storage business. It is possible to register a website or help other entrepreneurs create them. This kind of opportunity makes little distinction between those in the developed and developing world. Because of low barriers to entry and limited bureaucracy globally, college students in the United States or a women’s collective in Southeast Asia can each become entrepreneurs reaching audiences well beyond their own communities.

The same is true of the ability to take advantage of the Internet’s natural efficiencies globally. In its 2016 World Development Report, the World Bank focused solely on the digital economy. Researchers followed businesses in developing countries from 2006 – 2011 and documented changes in their efficiency, productivity, and success. This was based on their access to and use of the Internet. One of the findings from the study was that even when faced with obstacles such as corruption and lack of skilled labor, Internet adoption still helped firms increase productivity.

In the United States, having an open Internet has resulted in the creation of a new sector. According to an Internet Association report measuring the size of the digital economy, that segment rivals that of the U.S. auto industry in size. There are also many other statistics which lay out the projected value of the cloud computing market, data processing, hosting and domain services markets. Without going into an exhaustive list of them all, they illustrate the need for conversations about economic growth and access to opportunity to include discussions about the benefits of a free and open Internet.

In its original planning documents about Net Neutrality, the Obama Administration noted that the Internet was originally designed to broaden our concept of communication. In its 2017 Information Economy Report, the United Nations Conference on Trade and Development (UNCTAD) notes that among the core industry drivers in the digital economy are components of the Internet infrastructure industry, as well as the Internet of Things and artificial intelligence. The report notes that these segments came into being because of the lightly regulated, but inclusive environment of the digital economy. It also pointed to disparities in available infrastructure and lack of harmonized legal regimes as barriers. In order for these and new ideas to flourish, further dialogue and engagement are needed to ensure nations and individuals are prepared to engage.

While there have been global benefits from Internet expansion, there are some places that haven’t had as much success as others. This presents an opportunity to make the story of the Internet more multifaceted and inclusive. The 2016 Digital Dividends Report tracked the spread of the Internet in the developing versus the developed world and noted how the benefits were allocated. According to the report, eight in 10 people in the developing world have a mobile phone. The lowest concentration of access is in Sub-Saharan Africa, and that lies at 70 percent just for mobile uses. In developed nations 9.8 in 10 people or 98 percent of the population has some kind of mobile device. The spread of Internet access, at least by mobile phone, has spread faster than any other development tool. This means the Internet is uniquely positioned to be inclusive and spread economic benefits in ways other livelihoods have not been able.

Women are participating, but lag behind in both access and entrepreneurship, even in the United States. Pew Internet Research noted that while about two-thirds of Americans have broadband access, minorities, people in rural areas, and women, tend to be less connected. Of those groups, people of color tend to rely solely on their smartphones for Internet access, which limits their ability to generate enterprises. This finding presents an opportunity for policymakers, funders and industry leaders interested in diversity, to find ways to support innovation in underserved areas. For example, it is entirely possible to have data center clusters and other hard infrastructure projects in parts of Sub-Saharan Africa and Latin America where development agencies have already begun tech innovation, job training, and infrastructure work. It is also quite possible to develop grant and seed funding projects to help women and underserved communities with digital entrepreneurship. This is an opportunity for private industry and governments around the world to collaborate on how to leverage the Internet as an economic accelerator and conduit for productive collaborations all over the world.