Post on 11-Jan-2017
THE ECONOMIC AND SOCIAL BENEFITS OF MOBILE INTERNET TECHNOLOGY IN VIETNAMOliver SalmonLead Economist
August 2016
2
INTRODUCTION
WHY IS MOBILE SUCH A TRANSFORMATIVE FORCE?
Applications for mobile internet
Allowing people to access a deep
web of information
A social connector of
people
Increased flexibility for
workers
Improving labour market matching
A source of education via
distance learning
Enabling small businesses to reach a wider customer base
3
INTRODUCTION
Over the past six months Oxford Economics has been engaged in an extensive research project to quantify the economic benefits of mobile internet technology. A multi-stage modelling programme has enabled us to estimate:
1. The historic contribution of mobile internet to GDP and jobs from 2010-2015;2. The projected forecast contribution of mobile internet to GDP and jobs from
2015-2020; and3. How this activity has and will continue to boost government revenues and
thus could support investments in social infrastructure.
The geographic focus of our analysis was ASEAN but here we drill down on our results for Vietnam. This event represents the first time that the results in any format have been shared publicly.
RESEARCH BACKGROUND
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BACKGROUND
• Mobile internet penetration in SEA remains slightly below the global average.
• However, the gap has narrowed significantly since 2012, a trend we expect to continue going forward.
MOBILE INTERNET GROWTH IN SOUTHEAST ASIA IN CONTEXT
2010 2011 2012 2013 20140
20
40
60
80
100
120
Australasia
E.Europe
N.America
N.E.Asia
S.Asia
S.E.Asia
Sub-Saharan Africa
W.Europe
World
Source: Oxford Economics/ITU
Active subscriptions per 100 inhabitants
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BACKGROUND
OUR RESEARCH SHOWS THAT SUCH GROWTH CREATES BENEFITS THROUGH TWO CHANNELS
• Mobile internet technology supports efficiency gains for businesses. Higher productivity is vital to supporting long-term growth and prosperity.
• Mobile internet enables more people to seek work in the formal economy. Through this channel mobile helps to create more jobs in the long-run.
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IMPACT IN SEA
WHICH HAVE ALREADY YIELDED SUBSTANTIAL ECONOMIC GAINS ACROSS ASEAN
• The application of these findings shows that mobile internet has already had a transformative economic impact.
• Growth in penetration estimated to have boosted ASEAN GDP by $47.2 billion and created over 900,000 new jobs.GDP (Left-hand axis) Jobs (Right-hand axis)
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
100
200
300
400
500
600
700
800
900
1,000
47,200 903
Source: Oxford Economics
JobsUS$ mns, 2015 prices
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IMPACT IN SEA
A PATTERN THAT WE EXPECT TO CONTINUE UP TO 2020
• Increased use of mobile internet is forecast to raise GDP by $58.1 billion over the next five years.
• Such a contribution compares favourably to major established sectors across the region.
Contribution to GDP growth*, 2015-2020
*The contribution of mobile internet refers to how it is estimated to have boosted the economy’s supply side capacity whereas sectoral figures show their demand-side contribution to GDP growth.
Utilities
Other Services
Extraction
Hotels & Accommodation
Information and Communications
Transport
Financial Services
Business Services
Mobile Internet
Agriculture
Public Services
Construction
Distribution
Manufacturing
0 20 40 60 80 100 120 140 160 180
58.1
US$ billionsSource: Oxford Economics
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IMPACT IN SEA
SUMMARY OF MAIN FINDINGS - SEA
• Mobile internet is predicted to continue to play an integral role in Southeast Asia’s growth story.
• Going forward, gains from higher penetration are forecast to total nearly 10% of predicted growth.
• Associated higher participation in the labour market will drive the creation of over 1 million new jobs.
• Natural boost to government revenue capable of supporting vital social investments.
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ECONOMIC AND SOCIAL VALUE IN VIETNAM
• Despite some convergence since 2010 mobile penetration in Vietnam remains well above the average in its income peer group.
VIETNAM SEEMS AHEAD OF THE CURVE BASED ON ITS INCOME
2010 2011 2012 2013 20140
10
20
30
40
50
60
70
80
90
Low income
Lower middle income
Vietnam
Upper middle income
High income
Source: Oxford Economics/ITU
Active mobile subscriptions per 100 inhabitants
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ECONOMIC AND SOCIAL VALUE IN VIETNAM
WHICH HAVE ALREADY YIELDED SUBSTANTIAL ECONOMIC GAINS FOR VIETNAM
• The application of these findings shows that mobile internet has already had a transformative economic impact.
• Growth in penetration since 2010 has resulted in a $3.7 billion boost to GDP and the creation of almost 140,000 new jobs.
GDP (Left-hand axis) Jobs (Right-hand axis)0
500
1000
1500
2000
2500
3000
3500
4000
0
20
40
60
80
100
120
140
160
3,700 137
Source: Oxford Economics
JobsUS$ mns, 2015 prices
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ECONOMIC AND SOCIAL VALUE IN VIETNAM
MOBILE INTERNET HAS BEEN A LEADING SOURCE OF GDP GROWTH SINCE 2010
• Increased use of mobile internet is estimated to have boosted GDP by $3.7 billion over the past five years.
• Equivalent to 6.4% of recorded GDP growth.
• Contribution matches that of established major industries.
Contribution to GDP growth*, 2010-2015
*The contribution of mobile internet refers to how it is estimated to have boosted the economy’s supply side capacity whereas sectoral figures show their demand-side contribution to GDP growth.
Information and Communications
Other Services
Transport
Construction
Hotels & Accommodation
Business Services
Financial Services
Extraction
Mobile Internet
Utilities
Public Services
Agriculture
Distribution
Manufacturing
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
3.7
US$ billionsSource: Oxford Economics
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ECONOMIC AND SOCIAL VALUE IN VIETNAM
AND HAS CREATED ALMOST 140,000 NEW JOBS IN VIETNAM
• Enhanced use of mobile technology has boosted labour market participation resulting in an extra 137,000 jobs over the past five years.
• Equivalent to 2.7% of total employment growth during this period.
Contribution to employment growth, 2010-2015
Agriculture
Extraction
Construction
Utilities
Business Services
Financial Services
Information and Communications
Mobile Internet
Other Services
Transport
Hotels & Accommodation
Public Services
Distribution
Manufacturing
-800 -400 0 400 800 1200 1600 2000 2400
137
Headcount jobs, '000sSource: Oxford Economics
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POTENTIAL FUTURE GAINS IN VIETNAM
GOING FORWARD WE EXPECT VIETNAM TO BROADLY MATCH REGIONAL GROWTH
• Looking ahead, we expect mobile internet growth in Vietnam to broadly match the forecast rate of increase across ASEAN.
• Subscription rate projected to almost double by 2020 – just under 80%.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200
10
20
30
40
50
60
70
80
90
100
Source: Oxford Economics/ITU
Active subscriptions per 100 inhabitants
Vietnam
South East Asia
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POTENTIAL FUTURE GAINS IN VIETNAM
MOBILE’S CONTRIBUTION TO GDP GROWTH EXPECTED TO RIVAL MAJOR INDUSTRIES
• The mobile internet boom is forecast to boost GDP by $5.1 billion over the next five years.
• Equivalent to 6.2% of forecast growth.
• On this basis mobile internet is a leading sectoral contributor to growth.
Forecast contribution to GDP growth*, 2015-2020
*The contribution of mobile internet refers to how it is estimated to have boosted the economy’s supply side capacity whereas sectoral figures show their demand-side contribution to GDP growth.
Information and Communications
Other Services
Transport
Hotels & Accommodation
Utilities
Construction
Financial Services
Mobile Internet
Business Services
Public Services
Extraction
Agriculture
Distribution
Manufacturing
0 2 4 6 8 10 12 14 16
5.1
US$ billionsSource: Oxford Economics
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POTENTIAL FUTURE GAINS IN VIETNAM
WITH A SIMILAR STORY EMERGING IN THE LABOUR MARKET
• We expect increased take up of mobile internet technology to create an extra 146,000 jobs up to 2020.
• Equivalent to 3.2% of forecast total employment growth during this period.
Agriculture
Extraction
Utilities
Information and Communications
Financial Services
Business Services
Mobile Internet
Other Services
Transport
Hotels & Accommodation
Construction
Public Services
Distribution
Manufacturing
-400 -200 0 200 400 600 800 1000 1200 1400
146
Headcount jobs, '000sSource: Oxford Economics
Contribution to employment growth, 2015-2020
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POTENTIAL FUTURE GAINS IN VIETNAM
ALL THIS ACTIVITY HAS BEEN AN IMPORTANT SUPPORT FOR THE PUBLIC FINANCES
• Extra jobs and higher productivity have both provided an important boost to the public finances.
• The extra wages and profits supported by the growth of mobile internet technology have increased revenues, sufficient to support:
• The construction of over 860 km of new two-lane highway
• Routine immunisation programmes for 20 years
• Primary school education for over 100,000 children
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POTENTIAL FUTURE GAINS IN VIETNAM
SUMMARY OF MAIN FINDINGS - VIETNAM
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All data shown in tables and charts is Oxford Economics’ own data, and is copyright © Oxford Economics Ltd, except where otherwise stated and cited in footnotes.
The modeling and results presented here are based on information provided by third parties, upon which Oxford Economics has relied in producing its report and forecasts in good faith. Any subsequent revision or update of those data will affect the assessments and projections shown.
To discuss the report further please contact:Henry Worthington: hworthington@oxfordeconomics.com
Oxford EconomicsBroadwall House, 21 Broadwall, London, SE1 9PL, UKTel: +44 207 803 1425
AUGUST 2016
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