The Internet is increasingly acquiring local character springing from the economic, political, and social factors that distinguish individual nations, according to the e-Intensity Index launched by The Boston Consulting Group (BCG). Joerg Hildebrandt, Partner and Managing Director in BCG, Middle East said, “Policy makers and business leaders want to know how different countries rank in terms of their ‘Internet intensity’ — in other words, the depth and reach of their digital activity. The BCG e-Intensity Index measures both a nation’s supply of Internet infrastructure and its demand for and use of Internet services.”
Specifically, the Index measures enablement: How well built is the infrastructure and how available is Internet access?
It measures expenditure: how much money is spent on online retail and online advertising?
And it measures engagement: how actively are businesses, governments, and consumers embracing the Internet?
Within the Middle East, the UAE leads with a ranking of 26 according to the BCG index. The UAE ranks highest in terms of enablement, followed by expenditure, and engagement. Similarly, Saudi Arabia, ranked 39th on the Index, ranks higher in terms of enablement as compared to expenditure and engagement. Interestingly, Egypt ranked 49th on the Index, has higher levels of engagement when compared to enablement or expenditure.
The Internet is taking on different local flavors that are a reflection of—or a response to—the physical world. In the UK, traditional shops have embraced the Internet, creating a nation of “digital shopkeepers,” while in the Czech Republic, online-only retailers are filling a void created by the underdevelopment of traditional retail channels. Hong Kong, with its well-established retail footprint, has a low level of online sales given the quality of its broadband infrastructure but a high level of business-to business engagement. “The BCG e-Intensity Index helps companies calibrate their business plans to national levels of consumer, business, and government engagement and the share of fixed versus mobile penetration”, said Hildebrandt.
In addition, the Internet is driving economic growth. Hence, policies that encourage Internet penetration and usage and that provide protections for customers making online purchases are critical. Policy makers should also be encouraging all businesses — not just high-tech companies — to embrace the Internet. In the UK, small and medium-size companies that make active use of the Internet grow seven times faster than companies that do not. Because the Internet is so far-reaching, officials from a number of different agencies, especially those regulating telecom, banking, commerce, and consumer affairs, will need to cooperate and coordinate their efforts.
Moreover, the Internet is adopting the local character and personality of its users. Hildebrandt explained: “In China and Russia, where English is less prevalent, local entrepreneurs are developing giant Internet businesses that spark envy in Silicon Valley. In countries such as India and Indonesia, the mobile phone has become the gateway to the Internet. Many of the most popular and useful mobile applications and services are emerging in these countries. In India, for example, the first bank account for many consumers may well be a mobile one. The Internet has truly gone native.”
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