20160726 google vietnam launch presentation english(1)

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

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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


Active mobile subscriptions per 100 inhabitants

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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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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



Other Services

Transport

Construction


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


12


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


Mobile Internet

Other Services

Transport


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


Active subscriptions per 100 inhabitants

Vietnam

South East Asia

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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



Other Services

Transport


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


15


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


Financial Services

Business Services

Mobile Internet

Other Services

Transport


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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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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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: [email protected]

Oxford EconomicsBroadwall House, 21 Broadwall, London, SE1 9PL, UKTel: +44 207 803 1425

AUGUST 2016

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