Studies by the Brookings Institute (2010), The Boston Consulting Group (2010), the US National Intelligence Council (2012) and the McKinsey Global Institute (2012), predict that over the next decade the global middle class will grow to exceed one billion people in the developing world. The majority of this growth will take place in Asia which according to the OECD (OECD Yearbook 2012) is expected to account for 66% of the global middle class population and 59% of middle class consumption by 2030 (in comparison to 28% and 23% in 2009). This trend, in conjunction with rising levels of Internet access and connectivity in the developing world will provide a new generation of global consumers with access to information, content and services. According to the Boston Consulting Group (2010 report, page 17) by 2015, Brazil, Russia, India and China will have 1.2 billion Internet users. As well as representing a potential growth engine/market for products and services – the tastes, preferences and political/economic aspirations of this new middle class will represent a tectonic shift in the demographic and cultural landscape of the Internet.

A 2012 report by the European Union Institute for Security Studies (see page 29) suggests that the emergence of a global middle class is likely to narrow material and cultural divides and foster the evolution of a global set of values which are more inclined towards the promotion of democracy and fundamental rights. Global advocacy networks which support human rights such as Human Rights Watch and Amnesty International are already benefiting significantly from the amplifier effect of new information and communications technologies (see page 31). In his May 2011 Report (see page 4) to the General Assembly, the United Nation’s Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression highlighted the role of the Internet as one of “the most powerful instruments of the 21^st century for increasing transparency in the conduct of the powerful, access to information, and for building active citizen participation in building democratic societies”.

The 2012 US National Security Council Report, Global Trends 2030 (see page 11), offers a case study on the rising use of online social media by women in Muslim countries. The report argues that despite some data correlating online access with radicalisation, “indications of female empowerment and solidarity are far more plentiful”, and that women are increasingly using online communities to reach beyond their everyday social networks into “safe spaces” to discuss women’s rights, gender equality and the role of women in Islamic law. As participation in online forums is closely linked with both income and literacy, the NIC predicts that as the global middle class expands, female online participation will increase with potentially significant repercussions for societies and governments.

The 2012 report by ESPAS, Global Trends 2030 – Citizens in an interconnected and polycentric world, suggests that the convergence of a rising global middle class in conjunction with new technologies will narrow the global digital divide whilst ensuring that the “citizens of 2030 will want a greater say in their future than those of previous generations” (see page 12). While the report predicts greater citizen empowerment in the developing world as a consequence of increased access to information, it also notes that globalisation and interdependence can also sponsor feelings of frustration and impotence in the face of world events beyond the influence of many individuals and governments (see page 47). In this context the expectations gap between increased access to information and on-going socio-economic inequalities could also sponsor a rise in identity politics and nationalism (see page 155).

According to the International Telecommunications Union’s 2012 report Measuring the Information Society (see page 7), the number of Internet users worldwide doubled in the five years to 2010 to reach 2 billion people. With 70% of the global population yet to experience the transformative benefits of broadband Internet access, the focus has intensified on how to reach the next 3^rd billion Internet users.

Research indicates that broadband penetration increases dramatically once its annual cost falls below 3% of annual family incomes (World Economic Forum 2012, page 42). Whilst this target has been largely surpassed in the developed world, there are 30 countries in which broadband cost exceeds 50% of average annual family incomes (Broadband Commission Annual Report 2012, page 42). In Africa, fixed broadband Internet access costs on average nearly three times the monthly average income per person (ITU 2012, page 4). Significant progress can be made if governments in the developing world can successfully transition from taxing technology purchases and infrastructure projects towards incentivising technology adoption as multiplier of jobs and economic growth. A 2012 report by the World Economic Forum suggests that Brazil, Russia, India, China, Turkey and Indonesia could expand Internet users by 860 million by reducing the cost of broadband by 50% (World Economic Forum 2012, page 83).   

In 2011 the ITU reported that the cost of the “ICT Price Basket” (covering tariffs for fixed/mobile telephony and fixed broadband services) continued to fall in global terms – with the cost of access to fixed broadband in particular falling by over 50% in the previous two years (see page iii). The ITU welcomed this trend, but emphasised that broadband is still too expensive in many developing countries where it can exceed more than 100% of average monthly income (in comparison to 1.5% of average monthly income in the developed world) (Ibid). In its subsequent 2012 report (see page 5) the ITU noted the encouraging growth of mobile and wireless broadband services in developing countries, but underlined that this cannot serve as a substitute for fixed-broadband which continues to provide higher speeds, capacity and quality of service (whilst requiring much larger investments in infrastructure).

The World Economic Forum offers a number of policy recommendations which could actively address future levels of broadband adoption (page 87). Their report suggests that a mixture of (1) government investment and regulatory incentives coordinated with national broadband plans with clearly defined ICT-related objectives; (2) increasing the availability of low cost pre-paid or subscription broadband packages from telecommunications providers including entry level packages with restricted speed/data caps; and (3) creative approaches such as pre-loaded data onto devices and maximising the accessibility of free public Internet access providers. In the case of the second recommendation above, the adoption in 2009 by Safaricom (see page 84) of a $5 pre-paid service with a 200MB data cap is attributed to doubling the purchases of personal computers in Kenya between 2009-2010 (average PC market growth in Africa for that period was 3%).

The long term trend towards increasing standardisation and interoperability (potentially coupled with pressure from regulators) is likely to result in the potential disintegration of many vertically integrated business models which ring fence consumers within proprietary walled gardens (e.g. Amazon, Apple….etc). At the same time, opportunities will potentially arise for the development of new proprietary cross-industry/horizontal value chains which will have new implications for consumer access to content and information.

The 2007 World Economic Forum report on the Digital Ecosystem: scenarios to 2015 (see page 8) also proposed some thought provoking questions about the potential trends likely to define the future of digital society.

• The first trend-related question was whether future digital information/content distribution and processing systems (alongside the aggregation of digital products and services) would be primarily controlled and led by industry – or organically shaped by communities and individuals. This question also focused on whether future innovation and the commercialisation of valuable digital assets would be controlled and led by industry – or whether communities would serve as incubators for innovation with individuals successfully commercialising their own digital products and services.

• The second trend-related question was whether the digital ecosystem would evolve towards being increasingly closed or increasingly open in its future operation.  An open system would be characterised by the interconnectedness of networks, platforms and devices supported by interoperability and common standards, a broad constellation of international actors and a supportive regulatory environment. In contrast, a closed system would be characterised by proprietary networks, platforms and devices operating within closed silos, vertically integrated content, services and conduits, maintained by a restrictive regulatory environment.

Figure 4 (see page 9) provides a helpful diagram which demonstrates the three potential outcomes from these trends acting together. These three outcomes are outlined below:

• Safe Havens (closed & industry led digital ecosystem) – in an unstable geopolitical environment high profile cyber trigger concerns about online security and a clamour from consumers, businesses and governments for virtual safe havens. Industry responds by vertically integrating to create secured walled environments which provide all digital services. This leads to a small number of digital services conglomerates approved by governments offering services based on proprietary platforms which lock in users. Value lies in creating bundled network and content packages.

• Middle Kingdoms (open & industry led digital ecosystem) – in a stable geopolitical environment consumers demand open and interoperable products and services. Industry and government co-regulation establishes common standards on privacy and security. The creation of secure identity banks ensure the protection of personal data. Governments support open systems and competition. The network is dominated by a few powerful intermediaries (middle kingdoms) between the users and a fragmented market of specialised providers and offerings. These intermediaries use powerful algorithms that find information and contextualise the results to individual needs. Value is captured by intermediaries and content creators.

• Youniverse (open & organic community led digital ecosystem) – in a stable geopolitical environment, users want to take control of their digital experience. New organisational structures and grass roots communities grow in power while distributed innovation models become mainstream for products, services and business models. Established businesses need to find ways to engage with this new digital ecosystem by attracting communities. Traditional aggregators are superseded by personal digital agents. The joint actions of all players lead to a new equilibrium which is based on interoperability, open systems and common standards. Open source software and collaborative community structures increase in sophistication.

OECD figures show that Internet traffic has risen by 13,000% in the last decade (World Economic Forum 2012, page 59), with more digital information created in 2008-2011 than in all of previous recorded history. In the developed world this explosion in traffic has put network operators under pressure to implement expensive upgrades to their communications infrastructure at the same time as their core revenue streams and profits are being squeezed by competing “over-the-top” services (Skype, FaceTime….etc).

In a context where there is no limit to the number and range of new data hungry services and applications Internet companies can offer consumers, the incentives for facility based Internet service providers to introduce traffic monitoring, inspection and network management regimes to cope with this new traffic will only increase with time. These monitoring/management systems can serve to optimise network performance and protect consumers from online threats – but they also raise questions about the security and privacy of consumer data. They also threaten to undermine the principle of network neutrality whereby network operators refrain from discriminating between different types of services, content and applications transmitted by their networks/infrastructure.