How Will The 'Rising Billion' Impact The Global Economy?

3 Billion more people online by 2020

When it comes to innovation, the so-called ‘developed world’ seems to stride ahead. It’s no wonder really – in more economically developed countries (MEDCs) there’s wider scope for investment and resources, and not to mention the nurturing of talent. However, as developing markets continue to grow, this is set to change. Various companies have turned their attention to providing mobile internet services to the 3.8 billion people who don’t yet have access to it. Through the expansion of smartphone use, consumer markets across the globe will enter a far more level playing field. Will less developed countries really be able to catch up with their forerunners in the technological boom? How will ubiquitous internet change global markets?

Laptops, tablets, smartphones and all of the other personal devices we hoard might be affordable for us, but they’re nowhere near as attainable for someone living in a less affluent country. This has led to a technological divide between the haves and the have-nots, and whilst these terms are not universal, they are largely accurate. Now, imagine if you could get hold of a smartphone for $4 – a far cry from the price of an iPhone even five years ago. In February 2016, Indian company Ringing Bells launched the Freedom 251, a smartphone with WiFi connectivity, Bluetooth, a 3.2 megapixel camera and 8 GB of storage. It quickly became apparent that the Freedom 251 was a nothing more than a scam. The Telecom Ministry later found that the phone could not be feasibly sold for less than $36. Despite the failure, the $4 smartphone planted an idea in the minds of phone manufacturers and network providers. Last month, Facebook provided access to basic internet services in Kenya, and Google are working on Project Loon, an initiative which offers quality internet services to remote areas. There’s even talk of a cheap Google smartphone to go with it. Speaking of Google, former employee Greg Wyler is teaming up with the ever-ambitious Elon Musk to launch 4,000 internet-enabling satellites into orbit. This isn’t great news for telcos, who now have to respond to new competition. In January 2017, Reliance Jio also plans to take on major telcos by launching India’s cheapest 4G smartphones – hopefully with greater success than Ringing Bells.

How will this disrupt the global economy?
Affordable personal devices will enable an entirely transformed market including billions of new consumers. A bigger market means more demand, and the influx of new cultural backgrounds will undoubtedly diversify the needs of that market. The sheer number of potential customers in developing areas is likely to affect the strategies even of Western businesses, and by altering their advertising and products they will contribute to globalisation. Once cheap devices are adopted, consumers in developing areas will be able to reap the benefits of connectivity, including access to the internet, which equals access to all the internet offers. Before ubiquitous connectivity, people had to make do with what they could physically find. Add the internet to a postcode and a bank card, and you’re allowing masses of consumers to get hold of exactly what they need. Mass internet provision will also enable educational opportunities through MOOCs, virtual training and good old fashioned search engines. The world will continue to get smaller as more connections are made, and the ‘new consumers’ will expect more from providers. It will no longer be a case of providing something for people in one part of the world and neglecting those in another.

Further opportunity for business. . .
For businesses, the continued globalisation of technology and innovation in developing areas will create exciting B2C and B2B opportunities. Young and established companies alike will have more opportunities for global expansion through partnerships, as well as a bigger potential customer-base.  However, there will be problems to overcome. The need for cheap consumer items could lead to cuts in all prices, which will be manageable when tech advances to the stage where it drives down production costs. . . but for now this will mean increased overheads. Another key consideration for companies is to work out how to respond to the demands of the changing market, whilst retaining value for existing consumer demographics who are long accustomed to technological innovation. Telcos will also have to respond to an influx of new competitors.

As outdated as these terms may be, the economic gap between MEDCs and LEDCs will remain, which means that the technological divide will too. The failure of the $4 smartphone represents the considerable distance that must still be travelled before technology can truly become dirt cheap – if it ever can, that is. Despite the clear differences between consumers in developed and developing countries, businesses (especially telcos and tech manufacturers) should be prepared for a changing global market. Technology will become cheaper, which will make it more accessible. Whilst personal devices targeting developing demand won’t offer the same quality as the latest iPhone or Android models, they will give internet access and connectivity to literally billions of people who didn’t have it before. This will impact social mentality and contribute to globalisation on all levels. It remains to be seen which company will successfully manufacture the first truly affordable mobile devices. . . watch this space.

Could your business capitalise on growing demand for cheap personal devices? Who are the major players in the race to answer consumer demand for tech in developing countries? Can established Western companies successfully address new cultural demands? Share your thoughts and opinions.