Revenge of the. . .Internet
Who Is on the Web and What Are the Opportunities?
by: Frankie Clogston
Eyemine News
Years ago it was just a few nerds, you know the perpetually adolescent engineering guys up late at night experimenting with a new mode of communication. Well, the nerds got revenge. They have bragging rights. They were on the cutting edge. Many of them made a lot of money and many are now the leaders and drivers of one helluva large community. There are over 200 million people worldwide that have connected to the Internet! That's according to Nua Surveys, which provides multi-sourced Internet data free on its website. www.nua.net
From my standpoint, the Revenge of the Internet means several things. It means, yes, that the nerds, the techs, are cashing in. The big amounts of money that used to come from either family lineage or Wall Street can now be made out West, or indeed from any virtual address. This is a revenge on conventional capitalism, as we used to know it. And the Internet can bring revenge in the form of social and economic development or democracy and social change for countries which have been behind, or peoples who have been denied information. There are examples of this happening. Unfortunately there are many cases where groups which were behind by other measures continue to be behind in access to the Internet. Let's hope they too learn the revenge tool of the Internet. Let's take a look at some of the key statistics.
People of all colors here in the United States and from all countries around the world are connected. More than half of the global Internet community, or over 120 million, are from the U.S. and Canada. The United States is the country with the most on-line: more than 100 million and as many as 118 million according to recent Nielsen/Net Ratings (November 1999). However the so-called digital divide does exist in America, with economics determining whether people are on-line. Poor rural households with incomes of less than 10,000 only had access to the web 2% of the time. Using an extreme comparison, urban households with incomes over $75,000 had access to the web 62% of the time.
As for racial communities on-line, results are mixed. As the Department of Commerce found in a 1999 report entitled Falling Through the Net, one third of white households had Internet access in 1998, but just 12% of Black households and 13% of Hispanic households had access. On the other hand, a whopping 64% of Asian households had access to the Web according to a recent study by Forrester Research (1999) - a higher percentage than that of white households. According to Nua Surveys, the U.S. ethnic market comprises one-third of the total market in the U.S., and is worth one trillion per year.
Europe is the next area of the world in terms of Internet users. There are an estimated 47 million users there, with the UK (12.5) million, Germany (9.9 million), and France (6.2 million) leading the way in having the highest numbers of people on the Web. However it is the Scandinavian countries where the highest percentage of the population is hooked up. Iceland leads the world with a percentage of 45% hooked up. Sweden and Denmark also have just over 40% of their populations on-line. This compares to 39% in the U.S. and just 22% in the UK. (Numbers from Nua Surveys). One wonders why Iceland is the most hooked up. . .could it have something to do with being remote? I'll have to check the numbers on South Pole web users.
The demographics of communities on the web are dynamic. In the UK for example, there are an estimated 10,000 new users every day, according to the NOP Research Group. According to CommerceNet and Nielsen Media Research, the Internet user's demographic profile in the UK today is very similar to that of North America two years ago. That from Jerome Samson,Director of Technology and Business Strategy at Nielsen Media Research, who says that in a sense UK users reap the benefits of a more mature industry and face a faster learning curve. They are embracing e-commerce faster than first-time users in North America did two years ago.
This of course is one positive way to consider the fact that other countries lag far behind North America in the Internet craze. On the consumer end or demand side, certainly the benefits of e-commerce are equal no matter when you enter. But on the retailer or supply side of e-commerce, North America has had a great advantage in being first from an economic standpoint. One need only consider the NASDAQ and all the millionaires from IPOs to see this.
Other points: Russia and Eastern Europe have a smaller base of Internet users than Western Europe, as might be expected. Russia for example has an estimated 1.2 million users while Hungary has 500,000, according to the International Data Corporation. But according to recent surveys, there are signs of growth in these figures. As of January, 2000, 4 % of Russians were on-line, and the craze was said to be catching on.
As for other parts of the world, Japan is second to the U.S. in the total number of users in a country. Asia BizTech estimated the number of users in Japan to be 18 million in April 1999. The survey showed that 35% of users were female and 22 percent of users had some experience with on-line commerce. Given the fact that only a very small percentage of women are elected to the government, for example, and to the corporate boardrooms, this number reflects a significant move toward gender equity when it comes to use of Internet technology.
Following Japan in numbers of Internet users in Asia are Australia, Taiwan, South Korea and China, which all have in the order of 4 to 8 million users of the Internet. In China, the number of people with access tripled last year according to a New York Times report. Given that China's communist government still controls other forms of media including television and newspapers, the number of Chinese using the Internet is significant. The Internet provides largely uncensored information, including material that could be critical of China - something unlikely to be found in Chinese media. In this example, and in the example of women users of the Internet in Japan, the powers of the Internet to provide access to information and technology are apparent - and information and technology are two of the most important tools behind social change.
In China, the supply side of the Internet is web developing along with the demand-side. Not only are the Chinese surfing the web, they are putting up websites. Online companies such as China.com and Sina.com raised a lot of money from IPOs in 1999. Investors from the U.S. and other countries are increasingly interested in China given its unrivaled potential market size. In the near future we should look to more Chinese companies going public and a growing number of joint ventures between U.S. and Chinese e-commerce.
But even with up to 7 million people on-line, less than one percent of the Chinese population of 1.2 billion people is hooked up to the web. In the second most populous country in the world, India, an even smaller percentage or .08%, are on-line (or 800,000 out of 1 billion). These percentages are alarmingly low when compared with the United States, the world's third most populous country, where an estimated 40% of the total population of about 275,000, is on-line. Brazil, the fifth most populous country does better. Of the estimated population of 165 million people, 5 million, or 3% are estimated to be on-line. (sources The United Nations and Nua Surveys).
The Internet is undoubtedly a tool for, as well as an index of, development in a country. If countries like India are to keep pace, increased access to the Internet will be yet another additional tool for development they will need. It is not coincidental that Brazil, which does have a larger share of its people on-line (3%), has higher economic productivity and remains the world's fifth largest economy. And it bodes well for Russia that 4% of its population is on-line.
Everywhere around the world Internet usage is growing. The supply side will have to keep up with this growth. We are likely to see more diverse websites, more multilingual websites and to hear of more joint ventures that cross ethnic lines within the country or that cross national lines. The business of e-commerce will be as exciting and diverse as the communities it reflects.
