Worldwide Internet Adoption: Leaders and Laggards
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Research Note
Strategic Planning
18 August 1998
A. Roussel
The speed at which the Internet is adopted around the world. will continue to vary. A
country's economic development will be a determining factor - but not the only one.
Core Topic
Networking: European Internet Regulatory and Adoption Issues
Key Issue
How will international differences and regulations affect Internet development in Europe?
Strategic Planning Assumption
The gap separating leading Internet adopters - industrialized countries - and less industrialized but more
populous countries will significantly decrease by 2002 (0.8 probability).
While the Internet continues to grow at an exponential rate internationally, its penetration rate
does not follow the same pattern in every country. Currently, countries with the highest number
of Internet users are the highly populated industrialized countries (United States, Japan, Canada,
Australia and Western European nations) as well as less populated countries that were early
adopters of the Internet (Finland, Sweden and Norway). The United States still has an
overwhelming lead in Internet adoption by business and home users, with about 54 percent of
total Internet usage around the world (see Figure 1). But other industrialized countries are
catching up in adopting Internet technologies. As a result, the U.S. share of Internet usage will
drop to about 40 percent by YE2000 (0.7 probability) - the current 54 percent figure already
represents a drop from 80 percent in 1991 and 65 percent in 1994. Also, by 2005,
industrialized countries will be replaced in their overall share of Internet usage by more populous
countries - such as Brazil, China or Russia - which are currently slowed in their adoption of new
technologies by economic problems (0.8 probability).
Figure 1
Internet Usage: Top 15 countries in 1Q98
Source: GartnerGroup
Figure 2 shows our projected Internet adoption rate by country to 2005. Nations high on the
growth curve (Type A) are those where a high GDP per capita - indicating a high level of
industrialization - will continue to be matched by a high number of Internet users: in these
countries, the population can afford such technological tools as terminals, modems and Internet
access lines (these being required elements to use the Internet). In addition, these countries show
a propensity to absorb other emerging technologies - such as VCRs and cellular phones -
quickly. This cultural element, combined with the availability of capital to purchase technology,
enables us to project that the Internet will continue to grow at a fast rate in these countries.
Figure 2
Internet Adoption Worldwide: Projected Growth to 2005, by Country
Source: GartnerGroup
Next on the growth curve come Type B countries, which display high levels of industrialization
but low Internet penetration. These are nations where the economic environment is favorable but
that have traditionally been suspicious of incorporating new or foreign-developed technologies
into their way of life - thus slowing mass penetration of the Internet.
Type C countries have a different Internet development pattern. So far, their lower
industrialization rate has slowed their population's access to the latest technology. However, we
expect their situation to evolve quickly, because they are moving up the economic scale rapidly
and they have recognized the importance of IT to spur economic development.
For Type D countries, we differentiate between NICs (in Latin America, Africa and Asia) -
where Internet growth will be closely intertwined with economic development - and
less-industrialized countries displaying high IT growth (such as India and China). In the latter, on
the one hand, because of the large size of the total population, overall Internet penetration in
these countries will be low to 2001. On the other hand, taken as a percentage of the population
having access to IT, Internet penetration will be equal or superior to that of industrialized
countries (0.7 probability). As a result, we forecast that the fast-paced adoption of the Internet
by the IT-oriented population will itself impact the overall economy in these countries, and even
push it forward. In turn, this will enable more mass penetration of the Internet.
Acronym Key
GDP Gross domestic product
NIC Newly industrialized country
VCR Video cassette recorder
Bottom Line: Multinational enterprises should keep in mind the various stages of penetration of
the Internet in different countries when incorporating Internet access in corporate strategy. They
should not expect to be able to implement intranets or reach potential customers via a Web page
in Japan or France at the same rate as they would in the United States or Finland. Enterprises
should adjust Internet deployment plans accordingly.
This document has been published by:
Service
Date
Document #
EMU Implementations
18 August 1998
SPA-05-1935
Enterprise Network Strategies Europe
18 August 1998
SPA-05-1935
Internet Strategies
18 August 1998
SPA-05-1935
PRISM for Networking
18 August 1998
SPA-05-1935
Internets - Europe
18 August 1998
SPA-05-1935
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