By Matt Rusling
Divon Lan, who explores emerging markets for Google, says the Tel Aviv, Israel he knew growing up in the 1970s was in many ways similar to the developing countries he works in now. But one crucial difference is that back then there were severe limits on the amount of information available to people in developing countries, whereas today the Internet has given them dramatically more access to the outside world.
“We had one TV channel run by the government so we learned whatever the government decided to tell us. And we had one library and I read everything in it by the sixth grade. That was all the information that was available,” he tells me in a recent Skype interview.
Such limits on the availability of information used to be typical in the developing world, but the Internet is changing that fast, as more people get online at a rapid clip.
Worldwide, 3.1 billion people have Internet access. Half of Southeast Asia’s 600 million-strong population will be online in three years – a 20 percent jump from current levels, according to Swiss Bank UBS. Plunging costs of smart phones are boosting Internet penetration at breakneck speed.
Indonesia, for example, aims to get more than half its population online this year – a roughly two-fold jump to 150 million people – and is already Facebook’s fourth largest global market.
Increased Internet access has already reduced poverty by 16 percent in East and Southeast Asia, by eliminating barriers that prevent people in low-income rural areas from accessing markets, according to a Deloitte report last year for Facebook, Inc.
Lan, whose job it is to ensure Google’s products are working in places where the company does not have an office, says the most important thing the Internet does is expose people to the outside world. That was mirrored in a recent trip he took to a rural Cambodian village, where residents’ forebears had done the backbreaking and ultra-low wage work of rice farming since agriculture was introduced to the region thousands of years ago.
But youth in this village is different from their parents and grandparents, because they have access to the Internet through their mobile phones and a couple of laptops owned by what he calls a young and inspiring teacher at their local school.
“These kids don’t want to be rice farmers. Their horizons are so expanded. They know what’s out there in the world. And their aspirations are much bigger than their parents’. They no longer accept their place in society in the way their parents did. So we are really in the midst of a revolution that happens only once in 10,000 years of humanity. And it’s all because of access to information,” Lan, who maintains his personal residence in Cambodia, tells me.
“The key thing is changing people’s perceptions about what is possible for their lives. Previously, people’s horizons were limited by the amount of information that was available to them,” he says.
That is being played out throughout the region and in tens of thousands of similar villages worldwide.
The Internet has also spawned ways of helping lower wage workers in Southeast Asia. Indonesian company Go-Jek, for example, links motorcycle taxis – a cheap form of transportation in Jakarta – with customers after just a couple of clicks of a cell phone. Previously, getting a motorcycle taxi meant going down to the sidewalk, finding a driver and negotiating a price, and drivers had to mill around for hours while waiting for the next customer. It also meant that drivers had to wait sometimes hours for a customer, and these low-wage workers were not paid for time spent waiting. Go-Jek solved that problem for many drivers, allowing them to boost their income and better support their families.
The web can also help people in the developing world learn English when foreign language instruction in local schools is lacking, as it often is in rural areas. That can help Southeast Asia’s poor escape a life of poverty by working in the tourist sector.
Still, there are many challenges in accessing the Internet, which is one of the things on which Lan’s work for Google is focused. There are linguistic challenges, for example in Cambodia, as there is not much content available in Khmer, Cambodia’s national language.
“We’re trying to chip away at those problems to bring information to everyone,” he says of how Google is addressing those issues.
While e-commerce is ticking upward in the region, and while people are now visiting e-commerce sites 41 times more than brick-and-mortar stores, according to UBS, many people use the sites just to browse.
They don’t trust the sites enough to provide their credit card information, since credit card fraud is rampant in places like Indonesia and elsewhere in Southeast Asia.
“It’s still difficult to transact remotely, both because the systems are not really in place and because culturally, trust is still very important in business transactions. People want to see the person they are transacting with,” Lan says, explaining that legal systems in the region are weak and don’t protect the consumer.
Still, Southeast Asia is seeing change unprecedented in thousands of years, and the middle class is surging as the free market continues to pull tens of millions out of abject poverty.
The Internet will be another piece of this change – if the hurdles can be overcome.
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