High quality web access can propel the Indian economy

Buoyed by the resurgence in the Indian economy, many of India's domestic and multinational firms are looking for innovative ways to reach more customers and accelerate growth. We are witnessing a race for customers across sectors in the Indian economy: banking & financial services, retail, healthcare, telecom and automobiles. India's top 1,000 companies are growing at a healthy rate and are continuously searching for newer technologies and digital channels to further expand their growth.

Underscoring this acceleration of technological adoption, the internet offers India's economy a wide array of possibilities that would, over the coming decade, help foster its ascension to become one of the dominant forces in the global market. It represents the strongest platform that can boost the country's indigenous tertiary sector by nurturing the growth of start-up enterprises as well as allow larger companies to tap into newer regional markets. The internet is also a vital resource that can enhance the skill sets of all employees and allow the domestic talent pool to expand vastly across each state.

Rise of India's netizens

The spread of the internet in India has been a gradual process. From the early 90's till the early 2000's, the country registered around 10 million users. However, with the rapid evolution of technology and the further opening of India's economy, that number quickly rose to around 100 million users in the following decade. Recently, the industry body-Internet and Mobile Association of India (IAMAI), announced in October 2014 that India has over 278 million internet users, which may further rise to 550 million in 2018. This would make India the second-largest online population in the world, which could have massive implications on the business landscape.

Market opportunities

From an economic perspective, according to Boston Consulting Group (BCG), a consistent focus on enhancing Internet growth across the country, could spawn an economy worth $200 billion from Internet related activities in just three years. This would amount to a four-fold increase compared to where things stand today. More importantly, most market analysts cite entrepreneurship as the primary catalyst that would further this growth. As we have seen with a wide variety of online firms that include Flipkart, Snapdeal, Ola Cabs and Practo, global investors are enthusiastic about the growth prospects in India which is being fuelled by the Internet.

According to consultancy firm PwC, the e-commerce sector has grown 34 per cent (CAGR) since 2009, reaching $16.4 billion in 2014. From here it is expected to reach a figure of about $22 billion in 2015. This is a very encouraging sign and indicates that the internet could also serve as a seamless channel for entrepreneurial ventures, to tap into markets beyond the borders of India without the need to invest heavily in terms of infrastructure and people.

On a bigger scale, the national government's plans of developing 100 smart cities offers an additional avenue where the internet, and more importantly cloud technology, can serve as a strong enabler. Steps towards the development of these cities are important as it is estimated that at least 50 per cent of Indians are set to live in urban areas by 2050, as against 32 per cent today.

More so, urbanisation and the move towards smart cities will empower the average Indian in a way that hasn't been experienced before. For example, in a smart city setup, an urban family need not venture outside to buy their groceries or inconvenience themselves to pay various household bills at specific offices/ deposit boxes or know when their automobile is due for service. The Internet of Things will make this possible online. Smart homes, run by the internet, would monitor all of this and make payments online, order groceries to be delivered at a specific time, monitor car maintenance as well as screen the physical and mental health of its occupants and alert them in case anyone needs medical care. This is when we see the truly transformative power of the internet move beyond just a commercial accelerator.

Job creation

Related to this, the labour market in the country would stand to benefit in numerous ways in terms of employment options as well as access to more education courses and training programs. Studies indicate that about 400,000 people now find direct employment because of the internet, and that could rise rapidly to over 2 million by 2020, having significant impact on India's economic and social makeup. The potential of elevating scores of people from remote or less-developed regions up the income ladder, and the formation of a new class of Indians will be realised. With central and state government focus and infrastructure enablement, the potential will be boundless. Should this translate into reality, India's internet economy could eventually create 65 million jobs and increase the per capita income by 29 per cent as more users get connected online, according to a Deloitte study.

Disruptors of growth

While more customers are using their smartphone and personal devices for shopping, banking and travelling, many aren't able to fully avail themselves of a number of services due inadequate access. In fact, Akamai's latest State of the Internet Report (SOTI) found that the average internet connection speed in India to be 2 Mbps in the fourth quarter of 2014. This shows growth of 2.1 per cent on a quarter-on-quarter basis and 28 per cent on a year-on-year basis. Though the country has registered an increase in average speed, it still ranks 116th globally in terms of average connection speed. Hence it is imperative that the state governments in their respective jurisdiction take steps to address the roadblocks that prevents enhancement and flow of internet traffic.

In the future to come

India is at a tipping point where a significant amount of economic growth can be encouraged with the help of internet. Hence, it is imperative to evolve an ecosystem where internet access will eventually emerge as a fundamental right for the billions of our citizens. As everyone and everything gets connected, the reliability, speed and security of connectivity will be more important than ever. This pervasive and high quality web access will help to ensure that India does indeed move forward to occupy its 'place in the sun' and become a true powerhouse for Asia and the rest of the world.

(The author is VP and MD, Akamai Technologies India)