It has become commonplace over the past decade to describe the BRICS – Brazil, Russia, India, China, and, more recently, South Africa – as a defining force in the global economy. While few can dispute the major shifts away from the advanced economies like the United States and those in Europe, the world’s future economic frontiers might be better captured by the acronym CHIIPs— referring to China, India, Indonesia and the Philippines. The world is increasingly defined more by digital chips than physical bricks, and these four countries accounted for more than half the world’s new Internet users since 2008.
The figures are embedded in a recent report by Mary Meeker and Liang Wu of Kleiner Perkins, the Silicon Valley venture capital firm. Meeker and Wu estimate that the global Internet user base grew more than 40 percent since 2008, with 663 million new people bringing the total number of users to 2.3 billion in 2011. The CHIIPs accounted for a remarkable 349 million newbies, with more than 200 million Chinese joining the fold.
Casual observers might think this trend is the result of a one-time catch-up as these countries with 40 percent of the world’s people industrialize and get online. However, Internet penetration hasn’t even surpassed 40 percent of the population in any of these countries, compared to roughly 80 percent in the United States. India still stands at a mere 10 percent penetration and technology there is leap-frogging. In May, its mobile-based Internet traffic surpassed its desktop-based traffic. The explosive transformation of global Internet usage will continue for several years to come.
The digital phenomenon is not limited to Asia. Nigeria had the fifth-fastest reported Internet growth since 2008, adding more than 20 million users. Mexico, ranked sixth, added almost the same amount. If watching Europe’s economy feels like an ever worsening sequel of “Groundhog Day,” the global CHIIPs film is “The Social Network” of rapid change to come.
The mass proliferation of mobile-based Internet carries far-reaching economic and social consequences. This was on vivid display in Shanghai last month when I sat on the jury of an “AppJam”— a meeting of tech-savvy young entrepreneurs who lock themselves in a room for an allotted time to map out new mobile Internet applications. At this particular competition, a handful of local technology companies dangled a blend of feedback, free pizza, and modest prizes to motivate aspiring participants in their quest for breakthrough apps for the Chinese market.
Several teams committed 45 hours over a sleep-deprived weekend in pursuit of a dream to become China’s Mark Zuckerberg. Most groups had a mix of Chinese, European and North America citizens and were fluidly bilingual between English and Mandarin. The average age was mid-20s. Such deeply cross-cultural innovation teams are clearly a growing norm.
The event’s winners tapped into undercurrents ranging from the unique traits of filing Chinese receipts to the deep affections for pets among the country’s growing middle class. I learned during the proceedings that a cute cat has one of the more significant followings on Weibo, China’s version of Twitter. As a non-twentysomething, non-Mandarin speaker who barely manages to tweet most days, I felt inspired for the world but worried for my own laggard ways amidst a joint revolution in global business and technology.
Recent history has underscored the precarious nature of geopolitical predictions, but CHIIPs-type change will probably bring at least two key shifts in favor of young people around the world. First, many of the pathways to accumulating money-based power are evolving fast. Today’s young people with coding skills and business smarts have an unprecedented opportunity to accumulate wealth early in life, since apps have the potential to scale so quickly. Indeed, Meeker and Wu estimate that 44 million apps are downloaded every day on iTunes alone.
Second, relative power balances between age groups will likely adjust as the duration of business innovation cycles seems to be shortening and many technology skills of older generations become outdated at an earlier life stage. This will further amplify young people’s share of long-term economic and political voice, even if that power still takes years to master.
While the advanced economies struggle to stem the risks of systemic meltdown, the underlying global economy is transforming. The shifts are geographic, technological and generational. As the world’s Internet infrastructure continues to evolve and take hold, a new breed of entrepreneurs will keep redefining molds. The CHIIPs label suggests a new frame. We need to start anticipating the implications.
Commentary
Op-edFrom Physical BRICS to Digital CHIIPs
July 2, 2012