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Connecting the Unconnected in Developing Asia (condensed)

Dr. David R. Dean
Member of the Future of the Internet Initiative of the World Economic Forum
Senior Advisor to The Boston Consulting Group

Asia is a continent of contrasts, and this is true of its digital economy too. Home to some of the highest connection speeds in the world, yet hundreds of millions of people remain unconnected—either because they have no access to the Internet, or cannot afford to use it. With the appropriate policies, investments and engagement, connecting the unconnected can transform lives, business, government and society.

We focus here on Asia161—one billion people in sixteen South, East and SE Asian countries, which are neither as rich and well developed as Singapore and Brunei, nor as expansive as China and India. Asia16's Internet population has doubled since 2010 to over 250 million users, and over 20% of its population lives in countries where Internet penetration is already at or above the global average—countries such as Malaysia, the Philippines and Viet Nam. As its Internet penetration doubles to half a billion [PDF, 1.5 MB] by 2020, one in four of all new Internet users globally will live in the region.

Today 775 million unconnected citizens live in Asia16, many in rural areas, with no access to infrastructure. Almost 450 million of them are women. Half live in the region's five poorest countries. Over 100 million of Asia16's adults are illiterate—62% of them women—and almost half of the region's adults are unbanked.

The value of connectivity

Bold and urgent action [PDF, 1.6 MB] is required to create an accessible and affordable Internet, and citizens with the skills to use it, especially in Asia16's poorest countries. Massive investment is needed too—perhaps $10-20 billion p.a. in telecoms infrastructure [PDF, 2.6 MB] over the next decade, as well as $4-5 billion p.a. in SE Asia alone to develop a flourishing digital ecosystem.

The economic rationale for these investments connecting the unconnected is clear. Countries can boost their GDP by 2-3% by reducing e-friction, the barriers to the digital economy's development. Malaysia has already become a third quintile country on BCG's e-friction Index—ranking better than some European countries—others still have some way to go.

So what needs to be done?

Four areas [PDF, 3.4 MB] need concerted attention: more widespread Internet infrastructure, more affordable services, relevant local digital content, and higher digital literacy skills. Successful countries have taken a comprehensive, multi-stakeholder approach to addressing these challenges.

Infrastructure access is a prerequisite. Governments can leverage successful practices seen elsewhere:

  • Define a long-term digital strategy, including a national broadband plan and establish a transparent, independent, regulatory framework.
  • Make international bandwidth available. Cambodia has no submarine cable landing station, and landlocked Lao PDR is dependent on low capacity landlines to its neighbors.
  • Promote competition—as seen in Myanmar [PDF, 1.4 MB], as it encourages investment and reduces prices.

Affordability is a significant hurdle. Not a single developing country [PDF, 1.6 MB] meets the UN's broadband affordability benchmark for those living in poverty. Several initiatives can bring costs down:

  • Reduce taxes on devices and access, as Sri Lanka did by foregoing new taxes on mobile phones.
  • Regard spectrum auctions as opportunities to attract infrastructure investment, rather than major revenue-generating opportunities.
  • Allow experimentation with different pricing models [PDF, 486 KB] for Internet services.
  • Promote carrier-neutral Internet exchange points (IXPs) to enhance local connectivity and reduce costs. Of roughly 500 IXPs worldwide, fewer than 30 are in Asia16.

Local digital content need encouraging. Making the Internet a relevant resource requires local-language content, applications and services. Proven steps include:

Skills need building. As well as basic literacy, lack of digital literacy is increasingly a constraint to employment. Actions that can make a difference include:

  • Drive for full school enrolment, especially for girls, and use technology to address teacher shortages as in Malaysia.
  • Create digital literacy programs for those no longer in the formal education system.
  • Support the development of entrepreneurial skills through tech hubs and educational programs.

Each country needs to identify which problems affect it most severely and adopt relevant solutions. Multi-stakeholder approaches involving governments, the private sector, civil society and NGOs can be very effective in building consensus on the most effective policies and defining the necessary, urgent and holistic actions.

Significant and lasting investments are needed to connect Asia16's unconnected. Some may baulk at the magnitudes involved, but government leaders and policy makers should ask themselves what the costs of inaction are—these are high too. For farsighted leaders, the answer will be clear.

Note: A longer version of this article appears at:

1 Specifically: Bangladesh, Bhutan, Cambodia, Indonesia, Lao PDR, Malaysia, Maldives, Mongolia, Myanmar, Nepal, Pakistan, the Philippines, Sri Lanka, Thailand, Timor-Leste, and Viet Nam.

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