Tuesday, February 2, 2016

Internet: Difference or Sameness Machine?

Sometimes it takes an economist to tell it like it is. Such was the case at a talk I recently attended. 

"The world is not getting more homogenous because of the Internet", said Rohinton Medhora, who specializes in monetary and trade policy and development economics.

So when Medhora continues and says more and more people are becoming less and less poor, even in the face of the rising inequality we all know is an economic reality, I’m inclined to believe him.

Now let's consider some statistics for benchmarking purposes:

20 years after the introduction of the consumer version of the Internet we’re not even at 50% global penetration; though we can see from the chart below that while it took 10 years to get to the first billion users, it took just 5 years to get to the second billion, and another 4 to get to the third billion.

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From the World  Bank there's further evidence that there’s a bottom billion that is disenfranchised when it comes to any form of Internet connectivity.

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We also need to factor in the issue of the cost of Internet varying considerably from country to country, with connectivity being a luxury that is well out of reach for most. For example, in Cuba it costs $2 for an hour of Internet use, while the average salary is about $20 per month. In Africa Internet connectivity is about nine times the cost of North America, and wages are 10% or less than those in most countries in the West.

But there's also good news according to Medhora. In the last 20 years the global middle class has doubled, the middle class being defined for these purposes as those with anywhere between $1 and $100 per day to spend. He further points out that the growth in this segment has led to a related adoption of Western values and consumer habits, and is happy to point out that globalization does not necessarily equal homogenization.

"It is not the McDonaldization of the world, but an explosion of diversity, with the connectedness availed to us by always-on devices allowing us to explore this diversity in depth, to connect with others who share those interests, and for transactions to take place instantly, regardless of geographical location", said Medhora.

And this is where the words of sociologist Raymond Williams are particularly resonant with regard to the effect of the Internet on culture. There are mass media but there are no mass peoplesaid Williams in the 1950s. This was a shortcoming in the age of broadcast, when programming and advertising campaigns had to necessarily be targeted to the large demographic in the middle of any chart, because costs of production, distribution, and promotion were high, and costs of mistakes even higher.

Even though connectivity is imperfectly distributed, the agora, or public space for discussion and argument, now extends to billions around the world. Twitter fights with strangers thousands of miles away are now a staple of modern life, often before one's first cup of coffee.

“Villages are not made to be singular and harmonious”, said Medhora, referencing the global village. It's reassuring to have data that suggest that thanks to Internet technologies we can have an increasingly interconnected global village of a world, without having an increasingly homogenous world of globalization.