Getting ready for the next (digital) billion consumers

The Digital Evolution Index


The Fletcher School at Tufts University in collaboration with MasterCard and DataCash have developed the Digital Evolution Index.

The DEI methodology measures the current ability of 50 countries to deliver on consumer demand and business supply, governmental policy and the innovation climate. Supply, Demand, Institutional and Innovation are the four drivers.

  1. How developed is digital and business infrastructure?
  2. Are consumers willing and able to transact in the digital environment?
  3. Are governments and institutions facilitating the creation of digital ecosystems?
  4. What is the extent of innovation happening in the digital commerce realm?

In addition to the current state, it measured the trajectory of these drivers 2008 through 2013.


2.9 billion global internet users.
Who’s next?

Internet usage has spiked from 14 million global users in 1993 to its current count of 2.9 billion, a compound annual growth rate of 30 percent. It took the Internet 12 years to gather its first billion users, and a third of that time to amass its third billion.

The next billion users — fully 25 percent of the current total — will come from the 60 percent of the global population still not digitally connected. The next billion users will also in large part depend on individual countries’ readiness for new users, and on those markets having infrastructure and policies successfully in place to meet the challenges and opportunities of the digital future.

The report reveals that five countries, in particular, show how the DEI defines the individual stories and conditions that drive digital evolution:

  • Estonia: Here the government is proactive in digital education. In fact, public schools teach first graders coding skills. There is free WiFi in most areas of country, with more than 900 hotspots. E-voting, e-payments for public transport and online banking are enabled through a single ID card.
  • Mexico: 75 percent of all households have access to mobile phones and retail eCommerce sales represent 31.5 percent of all business-to-consumer sales. Most developed countries average around 10 to 12 percent.
  • Nigeria: Only 8.1 percent of the population has access to personal computers, but mobile penetration is 94 percent. Innovation is active with a 674 percent increase in capital investments from 2008 to 2013.
  • Netherlands: Internet penetration is 92 percent and eCommerce is strong. 46 million online orders were placed in 2013, a 10 percent increase from 2012. It maintained a top two ranking under the Supply driver in the Index from 2008 to 2013.
  • Malaysia: There has been a 310 percent growth in the smartphone market with government subsidies for young, low-income consumers. Digital growth could yield large dividends due to proximity to ASEAN markets such as Indonesia, the Philippines and Singapore. Malaysia is one of the fastest moving countries on the index: Its score under the Innovation pillar increased by 42 percent from 2008 to 2013.

The Evolution

Source: Digital Evolution Index by By The Fletcher School at Tufts University in collaboration with
MasterCard and DataCash.

Trends

  • Break Out and Watch Out markets such as South Africa, Indonesia, Vietnam and Mexico have registered the highest gains in demand during 2008–2013, yet face significant limitations in supply conditions.
  • China’s tilt toward greater consumption and India’s improving supply infrastructure will, in the near term, create significant investment opportunities, given adequate institutional support.
  • The increasingly integrating ASEAN economies, with their similar trajectories and more than 600 million consumers, are as compelling as India and China as candidates for digital commerce investments. ASEAN’s integration and tariff harmonization is poised to generate opportunities for the creation of regional marketplaces and integrated delivery networks.
  • Taking advantage of increased regional integration by selling across national borders to the 500-plus million consumers in the wider EU could help jump-start these Stalling Out economies.

Country List

Source: Digital Evolution Index By The Fletcher School at Tufts University in collaboration with
MasterCard and DataCash.