Why it is critical for social impact projects to understand the direction of the second half of the internet revolution

Two new articles in The Economist on the second internet revolution are essential reading for ecosystem partners. Should we be focusing on experiential content and videos / games as a catalyst for social impact products?

To help those who are not subscribers I’ve pulled out some statistics and key points from https://www.economist.com/briefing/2019/06/08/how-the-pursuit-of-leisure-drives-internet-use?frsc=dg|e and https://www.economist.com/leaders/2019/06/08/the-second-half-of-humanity-is-joining-the-internet?frsc=dg|e.

– In 2007 more humans lived in cities than outside them for the first time. It was a transition 5,000 years in the making. The internet has been quicker to reach the halfway mark. Over 50% of the planet’s population is now online, a mere quarter of a century after the web first took off among tech-savvy types in the West. The second half of the internet revolution has begun.

– At some time in 2018 the proportion of the global population using the internet rose above half, according to the International Telecommunications Union, a United Nations agency. The second half of the internet will not come online as quickly as the first half was doing in the early 2010s; exponential growth cannot continue in a finite world. But if the 710m new internet users expected to come online in the next seven years is only half the number that arrived in the past seven years, it is still a mighty throng.

– Most new users are in the emerging world; some 726m people came online in the past three years alone. China is still growing fast. But much of the rise is coming from poorer places, notably India and Africa.

– On the positive side, charities and aid workers talk endlessly and earnestly about how smartphones will allow farmers to check crop prices, let villagers sign up for online education and help doctors boost vaccination rates. Less well appreciated is that the main attractions of being online are the same for the second half as they were for the first. Socialising and play, not work and self-improvement, are the draw.

– Dating apps are more popular than farming advice; video games are more popular than either. Such boons are unlikely to make their way into many UN development reports. But they are a boost to the stock of human happiness.

– In the emerging world, established firms are likely to be disrupted more quickly than incumbents were in the rich world. They have less infrastructure, such as warehouses and retail sites, to act as a barrier to entry.

– There is a huge amount of money at stake—the total market value of incumbent firms in the emerging world, outside China, is $8trn. If you thought the first half of the internet revolution was disruptive, just wait until you see the second act.

– According to Payal Arora, a professor at Erasmus University in Rotterdam, the internet is the leisure economy of the world’s poor.

– Until recently, talk of connectivity in the poor world has almost invariably been clothed in the pragmatic and well-meaning language of development. Aid agencies, international bodies and big tech companies told themselves and their funders that poor people needed an internet connection to lift themselves out of misery. They extolled farmers looking up grain prices, women seeking information on maternal health or pupils diligently signing up for online courses.

– Years of fieldwork across the globe have led Ms Arora to conclude that when it comes to getting online, “play dominates work, and leisure overtakes labour.” Where people planning development strategies imagined, metaphorically at least, Blackberries providing new efficiencies and productivity, consumers wanted the chat, apps and games of the iPhone. Worthier uses tend to follow. But they are the cart not the horse.

– A survey of online activity in sub-Saharan Africa by Pew Research Center, a pollster, saw 85% of respondents saying they used the internet to stay in touch with friends and family. Only 17% said they used it to take classes.

– Global as the trend is, though, India is the best place to observe it—and perhaps profit from it. It has a relatively open market and a newbie population that is large, linguistically diverse and poor, which makes it a proxy for the second half worldwide. The extraordinary speed of its boom is forcing companies to come up with new products and services that fit what the second half wants at a breakneck pace.

– According to India’s telecoms regulator, subscriptions for mobile-broadband services more than doubled between the end of 2016 and the end of 2018, from 218m to 500m.

– “Timepass” – the Indian word for killing time – is the essence of the internet. The vast majority of the top 25 apps by revenue in both Google’s and Apple’s app stores are games (and both companies announced new paid gaming services this year). Tencent became one of China’s internet giants because of games. Facebook grew into the world’s sixth-most valuable company by giving people a place to “do timepass”. YouTube is the gateway to several lifetimes’ worth of timepass. The fastest-growing new apps of recent years have all been aimed at timepass: Fortnite, WhatsApp, Instagram, Snapchat. TikTok, which consists of 15-second videos, is timepass in its essence, made by bored kids in mofussil towns who have found vast audiences by doing silly things.

– The most striking thing they are doing is watching videos — which they are also making, in great abundance. In 2016 there were only 20 Indian YouTube channels with more than 1m subscribers. Today there are 600. Video offers its users whatever their lives need. To many in the second half video more or less is the internet. Anecdotally, it seems that YouTube is a more common Indian home page than Google. It is used to search not just for entertainment but for everything else.

– The preference for video is partially explained by the fact that the next half of the internet speaks a very wide range of languages — but may not read any. Video in another language works better than text; video is easier to post to your peers than writing is. And speech beats typing—as can be seen from the use of WhatsApp to send voice messages rather than texts.

– Smartphones and social media are, for many in the second half, arenas with a semblance of privacy. While Western internet users fret about the privacy implications of big tech companies hoarding their data, young internet users in the towns and villages of the developing world are delighted to have, for the first time, a way to communicate and express themselves away from the prying eyes of family, neighbours and other busybodies. In Asia and the Middle East smartphones open up a world of romance, enabling people to flirt and date despite social constraints. All over, they allow people who may never travel abroad to make new friends around the world — and people who are travelling, often as migrant workers, to stay in touch.

– Providing access to entertainment, opportunities for a richer social life and the ability to speak and be heard to hundreds of millions will mark a profound improvement in humankind’s aggregate quality of life.


Wow, a very compelling post! Thank you so much for this.

It is indeed interesting that internet usage is rising all over the world, and specifically in the 3rd world. However many people in poverty-ridden areas still use basic phones with limited capabilities, and thus financial solutions may need to take that into consideration.

An interesting SMS-based financial system prototype was developed in our recent hackathon on March 2019: http://github.com/gooddollarhackathoner/mandax