Offline and falling behind: Barriers to Internet adoption

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McKinsey Quarterly

McKinsey & Company

More than 60 percent of the world’s population remains offline. Without removing crucial deterrents to Internet adoption, little will change—and more than 4 billion people may be left behind.

In a little more than a generation, the Internet has grown from a nascent technology to a tool that is transforming how people, businesses, and governments communicate and engage. The Internet’s economic impact has been massive, making significant contributions to nations’ gross domestic product (GDP) and fueling new, innovative industries. It has also generated societal change by connecting individuals and communities, providing access to information and education, and promoting greater transparency.

However, not all countries have harnessed the Internet’s benefits to the same degree. In a new report, we examine the evolution of Internet adoption around the world, the factors that enable the development of a vibrant Internet ecosystem, and the barriers that are impeding more than 60 percent of the global population from getting online. Several findings emerged.

  1. Over the past decade, the global online population grew to just over 2.7 billion people, driven by five trends. Some 1.8 billion people have come online since 2004, with this growth fueled by five trends: the expansion of mobile-network coverage and increasing mobile-Internet adoption, urbanization, shrinking device and data-plan prices, a growing middle class, and the increasing utility of the Internet.
  2. At the current trajectory, an additional 500 million to 900 million people are forecast to join the online population by 2017. However, these gains will still leave up to 4.2 billion people offline. The rate of growth of worldwide Internet users slowed from a three-year compound annual growth rate (CAGR) of 15.1 percent from 2005 to 2008 to 10.4 percent from 2009 to 2013. Without a significant change in technology, in income growth or in the economics of access, or policies to spur Internet adoption, the rate of growth will continue to slow. The demographic profile and context of the offline population makes it unlikely that these individuals will come online solely as a result of the trends that have driven adoption over the past decade. Estimates from multiple sources suggest that 500 million to 900 million people will join the online ranks by 2017, expanding the online population to 3.2 billion to 3.6 billion users. By these projections, between 3.8 billion and 4.2 billion people—more than half of the forecasted global population—will remain offline in 2017.
  3. About 75 percent of the offline population is concentrated in 20 countries and is disproportionately rural, low income, elderly, illiterate, and female. We estimate that approximately 64 percent of these offline individuals live in rural areas, whereas 24 percent of today’s Internet users are considered rural. As much as 50 percent of offline individuals have an income below the average of their respective country’s poverty line and median income. Furthermore, we estimate that 18 percent of non-Internet users are seniors (aged 55 or older), while about 7 percent of the online population are in that age bracket. Approximately 28 percent of the offline population is illiterate, while we estimate that close to 100 percent of the online population can read and write. Lastly, we estimate that 52 percent of the offline population is female, while women make up 42 percent of the online population. (...)