India’s internet economy is expected to double to $250 billion, says a report recently published by the Boston Consulting Group (BCG), along with The Indus Entrepreneurs (TIE). Titled ‘The $250 Billion Digital Volcano: Dormant No More’ the report was released on Friday during India Internet Day.
According to the report, e-commerce and financial services are expected to drive this growth, accounting for about $40-$50 billion of the Internet economy, followed by e-commerce products ($45-$50 billion), private and government infrastructure spending ($50-$60 billion), connectivity ($45-$55 billion), devices ($30-$40 billion) and digital media and advertising ($5-$8 billion).
The report reveals that while so far mobile internet users have proliferated and smartphone users have gone up by 4 times, high-speed internet users have still been limited only to approximately 56 percent. Thus, average data consumption per user continues to be low, standing at less than 1 GB data per month vis-a-vis developing economies like Indonesia and Brazil at 2–3 GB/month and developed economies like Japan and US at 9–11 GB/month. However, the situation is about to change.
“It is essential to understand the three forces that are now synergizing to unlock internet consumption in India,” said Nimisha Jain, a BCG partner, and report co-author. “Firstly, by 2020, 4G-enabled devices are expected to grow 6 times to 550 Mn devices, constituting 70 percent devices in use. Secondly, reliable high-speed data is becoming both ubiquitous as well as mass affordable (data rates have reduced to less than one-third in just 4–5 months). Lastly, digital content is proliferating as well as improving in quality, thus driving consumption.”
Geetika Dayal, Executive Director, TiE Delhi-NCR added, “The report comes at a time when the conversation has moved from ‘Internet of Things’ to ‘Internet of Everything’, and digitization presents a great opportunity for multiple stakeholders. Innovation is what leads to sustainability, and sustainable growth in the current entrepreneurship ecosystem will enable India to chart its own success story.”
India’s internet economy is expected to double to become USD 250 Bn by 2020. E-commerce and financial services are projected to lead this growth. For instance, share of digital payment transactions could more than double to go up to 30–40 percent by 2020. Digital economy will have a much broader influence beyond the direct economic impact. Digital adoption will deliver several citizen-centric social benefits like enhancing ease of doing business, improving access to services and products and transforming governance.
As the new digital paradigm emerges, adapting to change will become critical. For instance, the impact on jobs is expected to be transformational. Increased automation will minimize manual and repetitive roles while roles in upcoming spaces become coveted, e.g. human-machine interaction. Existing roles will also undergo a transformation as low-value adding tasks get automated. New ways of working are expected to emerge with an increasingly flexible workforce optimizing for efficiency. At the same time, genesis of new technology-led business models will give impetus to entrepreneurial activity and create new opportunities.