Closing the Internet Divide
Whether it concerns income, education, healthcare or technology, the divide between the “haves” and the “have nots” is a source of constant discussion. As the Web went mainstream in the mid nineties, it rapidly created a new type of technology gap — an “Internet Divide” — as those who were connected benefited from services and content that began to impact every facet of their lives, while those who weren’t missed out on great opportunities.
Access to the Internet has come to represent the new wealth gap, and the Web is now so pervasive that this gap can be found everywhere — between states, countries, demographic segments and business sectors. But while the educational, social and cultural impacts of being connected are well documented, is there also a very real financial factor? What is the correlation between Internet connectivity and prosperity? Can getting more people online help turn around an ailing global economy?
The closure of the divide will suddenly grant everyone an equal chance to succeed. But the onus is on both the public and private sectors to keep innovating to deliver the low-cost services, connectivity and devices to help close this gap as quickly as possible.
In the United States, the divide is slowly but surely being eradicated. Broadband penetration currently stands around the 70 percent mark with more than 85 million homes having fixed broadband subscriptions. The FCC National Broadband Plan will further extend the connected experience with the goal of taking Internet access to every American by 2020. The implications are huge. Connecting the masses, both domestically and internationally, to the Internet is set to fundamentally improve the quality of people’s lives and close the Internet Divide.
While providing broadband access is a critical step, it will be engagement that really closes this technology gap. People willing to immerse themselves in the Web and harness its connectivity to shop, learn, consume information and do business will find their lives enriched. Embraced in the right fashion, the Internet provides power and opportunity where it never before existed. Small businesses can compete with much larger corporations on a footing they would never have thought possible. Organizations are being forced to deliver a better experience and be far more price competitive than they ever needed to be, which is great news for the consumer.
The Internet has opened up a world of competition, giving consumers far more power than ever before, especially in markets like retail — competitors have increased, prices have fallen. In 2010, $142 billion dollars were generated by retail shopping sites, with that number expected to reach $269 billion by 2015. The number of online shoppers in the U.S. is expected to grow from 140 million in 2010 to 170 million in 2015. We no longer need to touch, feel or see the products before we buy them. Our retail behaviors and our attitudes toward shopping have fundamentally changed.
Retailers that embraced the Internet in the right way early on carved out a huge financial advantage over their less progressive foes. Connectivity made physical location irrelevant and gave the individual with a bright idea the power to challenge the mighty corporations. Without the need for expensive stores, they can administer their business from wherever they choose and cost effectively ship product from around the world. But while that connectivity allows a business to operate from anywhere, it enables its competitors to do exactly the same — the opportunity for growth and the threat from competitors created by the Internet are two factors that are intrinsically linked. Connectivity opens up markets to a slew of new entrants; those that are strong, innovative and, most-importantly, focused on customer experience will be the ones that survive.
And that customer experience has become paramount, especially for markets like hospitality. While once restaurants only needed to worry about word of mouth to drive reservations, now their potential patrons have a world of reviews on their mobile devices. A bad review of their service can be shared in seconds via the Internet and has the capacity to destroy a business in a matter of weeks. Reports have revealed that a one star increase in a Yelp rating provides a 5 percent to 9 percent increase in revenue. An impeccable experience has suddenly become table stakes.
Arguably, the quality of experience for shoppers, diners and guests is better now than it was a decade ago because of the Internet. And while connectivity has leveled the playing field for retailers and restaurants, the same is true for big business.
The Internet has put developing nations head to head with developed countries in many industries — in geographic terms, the Internet Divide is starting to disappear. The ability to deliver comparable services for a far lower cost thanks to the Web has again created opportunity for the traditionally disadvantaged competitor. In the last ten years, top U.S. corporations like General Electric, Microsoft and Chevron have outsourced some 2.4 million jobs from North America to developing nations. That outsourcing is taking place because we, as a planet, are more connected. And countries like India and the Philippines are capitalizing on the investment of global businesses.
The link between connectivity and prosperity is real. In a time where the global economic situation has rarely looked so dire, connectivity can create significant financial opportunity. Every person online who is demanding and accessing services or consuming content is not only experiencing an improved quality of life, but is also generating revenue for someone. And the more people we get online, the more that revenue increases. The economic benefit has the potential to be vast.
My vision is for a world in which the Internet Divide — and the wealth gap it creates — no longer exists. People who harness the Web effectively will compete on an even footing, and the quality of life will be improved across the board. For the gap to be bridged, though, corporations and governments need to maintain their focus on bringing the Internet to the masses and on educating the masses on how to capitalize on the opportunity. We need to continue to push broadband access into rural areas, support developing nations in building out their infrastructures and keep developing increasingly advanced devices — from handsets to tablets to routers — that give individuals the power to connect, regardless of location. And beyond the devices and the access, we need to ensure people have the tips, tools and training they need to become proficient and productive online. This will ensure that the opportunities and benefits the Internet offers are enjoyed by the masses.
Every day we’re developing these tools and taking strides that help us bridge the gap. Increased access and better connectivity creates opportunity for everyone.
Patrick C.S. Lo is the co-founder of Netgear and has been the Chairman and CEO since 2002. Patrick founded Netgear with Mark Merrill with the singular vision of providing the appliances to enable everyone in the world to connect to the high-speed Internet for information, communication, business transactions, education and entertainment.
