What does the future hold for the internet?

The World Economic Forum’s Future of the Internet Initiative (FII) is anchored in the Fourth Industrial Revolution. The first three industrial revolutions were based on steam power, mass production and the computer. The Fourth Revolution has the internet at its centre, as a catalyst for a deep transformation of the global economy and society.

The Fourth Industrial Revolution is evolving at an exponential rather than a linear pace; a convergence of multiple technologies, including artificial intelligence, robotics, 3D-printing, nanotechnology, materials science and energy storage, all enabled by the internet.

The internet is the central “life support system” for the Fourth Industrial Revolution. Connectivity through mobile, cloud and sensors link personal and machine devices to virtual networks. Billions of connected devices around the world connect people, homes, transport, manufacturing and logistics enabling us to optimise assets, manage supply chains and improve quality of life.

No Institution, government, business, or system is able to govern the internet alone. The aim of the Future of The Internet Initiative is to help shape the direction of the internet as a true and open platform, and as a driver of economic development and social progress. It focuses on the most important issues of transformation, access, security and governance to find long term sustainable solutions through analysis, dialogue, and action. The core objective is to promote the long term health and stability of the internet.

The internet is a worldwide system of computer networks. FII is less about the technical evolution of the internet, and more about what happens on the net and how it is used. The internet is changing the way we work, produce, live, shop, travel and stay healthy. These changes are being driven by a series of digital technologies which together create the opportunity for large scale disruption.

At the centre of this technology wave is data processing and data analytics. The volumes of data are growing at 40% each year and will increase 50 times by 2020; Singapore based Aureus Analytics estimates that 90% of all data in the world was created in the last 2 years. These volumes of data will require a massive increase in processing power. This is the role provided by cloud computing, which allows new IT capacity to be added at variable cost. What becomes critical is the insight that can be driven from the data and so analytics in the form of increased sophistication of algorithms and predictive modelling become key to enhanced data driven decision making. As individuals we want to be connected 24/7; mobile usage drives up personal data volumes and the growth of ubiquitous sensors connects multiple devices to the internet; a world where data becomes the 21st Century currency.

Personal connectivity is one very visible sign of how the internet is being used. Fifty-one percent of all internet users worldwide are in Asia and China. In the two biggest countries in that region, China has 1.3 billion mobile subscriptions out of a population of 1.36 billion whilst India has 0.91 billion mobile subscriptions out of a 1.25 billion population. China and India together account for more than 2 billion of the 5.2 billion mobile phone users globally. Smartphone subscriptions are growing at the rate of 17-19% pa and now amount to 2.1 billion. It is not just the number of mobile subscriptions that are growing but also the volumes are increasing. Consumer internet traffic is growing at 21% per annum, of which mobile internet traffic is accelerating at more than 60% every year. The smartphone has become an essential; 87% of US millennials say that the smartphone never leaves their side and 44% use their camera or video function daily.

If the growth of personal connectivity is significant, the growth of industrial data is accelerating at an even faster rate. Today, Gartner estimates there are about 4.9 billion connected devices covering products from cars, homes, appliances, and industrial equipment. This will reach 25 billion by 2020, driven by initiatives like the roll out of smart metres and the introduction of more efficient street lighting. This rapid rise in industrial data will also prompt the need for digital security services focussed on protecting the data integrity of devices using the industrial internet. Incidents of cybercrime are rising significantly; the UK reported that there were 2.5 million computer related criminal offences in the 12 months to June 2015.

The four main themes of the FII project focus on the opportunities and the challenges of the internet. The digital transformation of industries analyses the impact of digital technologies on business and society. The analyses focus on value shifts in each industry. Many of the digital benefits to date have come through efficiency gains as more data provides the insights to optimise assets and customer propositions. The emerging upside is the ability to drive new sources of value from digital transformation. New propositions such as city car hire schemes are creating new partnerships, new business models, and new platforms for bringing buyers and sellers together.

The United Nations Sustainable Development Goals (SDGs) are a global plan to reduce poverty, advance health and education and improve the environment. The SDGs recognise that the internet is a key enabler to achieve the goals by connecting communities around the world that are neglected and underserved. Goal 9c sets an ambitious target to “significantly increase access to information and communications technology and strive to provide universal and affordable access to the internet in least developed countries by 2020.” There is also a significant gender aspect to access. Women in developing countries in Africa, Asia and South America are 50% less likely than men – with the same education, income and age – to have access to the internet.

Quicker internet access for all requires infrastructure, affordability, skills and local content. This framework serves as the foundation for catalysing action that will develop new models of public-private collaboration to accelerate the “connecting the unconnected” in initially up to four countries. The first multistakeholder country programme is expected to be the Northern Corridor in East Africa, consisting of Kenya, Rwanda, Uganda and South Sudan, with the formal launch at the World Economic Forum Africa meeting in May 2016. Additional country programs in Asia and Latin America are also being explored for launch in latter 2016 and 2017.

The centre piece of the governance work has been a report on Internet Fragmentation produced for the Forum by three internet experts: Bill Drake, Vint Cerf and Wolfgang Kleinwachter. The report examines all the main sources of fragmentation and identifies 29 examples of potential or current fragmentation of or on the internet. Fourteen examples are classified as infrastructure related; six are governmental fragmentation with a further five specific to data localisation; and four identified as commercial fragmentation. The final category includes issues of corporate walled gardens where there is a shift from a wide open web to semi-closed platforms that use the net but make data portability for customers more difficult. The provision of zero rating services is a contentious topic where certain customers are able to access specific sources of content free of charge. This can be attractive to lower income people, who are new to the internet, but their choices are constrained to a small subset of selected internet sites, applications and services. But the core underlying theme emerging from the report is the tension between the growing desire for digital sovereignty and the need for global interoperability to maintain an open internet.

FII has been working with the Harvard Berkman centre to understand how to measure and report on the changing internet landscape. The Centre built out an internet monitor dashboard designed to draw on multiple data sources and highlight key internet trends. The dashboard went live in September 2015 and has been seen by over 5000 users with 9000 page views. The monitor has over 400 registered users and 2864 dashboards to view. Discussions are in process to access more data from both the GSMA on mobile connections and ISOC on internet transit costs.

There will be three important topics that will be centre stage in 2016: Digital Trade, Safe Harbour and Cyber Security. Digital trade is defined as commerce in products and services delivered by the internet. The Trans Pacific Partnership (TPP) between 12 countries agreed in October 2015 paves the wave for more digital trade. The Safe Harbour ruling by the European Court of Justice has left businesses on both sides of the Atlantic concerned about the impact of cross border data flows on commerce. We can expect major discussions to produce a new Safe Harbour 2.0 agreement in 2016. The growth in personal, commercial and public sector information will demand that boardrooms become better equipped to protect, detect and respond to cyber threats in the future. There is a big opportunity to raise digital understanding of what works in practice, conduct more research into the state of digital public private collaboration and find solutions to some of the internet’s most pressing challenges in the year ahead.

Author: Mark Spelman, Co-Head, Future of the Internet Initiative, Member of the Executive Committee, World Economic Forum

Image: Attendees surf the internet at the Milken Institute Global Conference in Beverly Hills, California May 1, 2013. REUTERS/Gus Ruelas