Why the Connected Economy Isn’t

The 2,000 members of the Marubo tribe were among the most disconnected people on Planet Earth. A people whose roots span many centuries, they live in a part of the Amazon rainforest in Brazil so remote that it is said to take a week or more to travel from one village to another. The Marubo ecosystem is communal and self-contained with its own language, religion, culture and economy.

I say “were” because in September 2023, Elon Musk’s Starlink satellite brought the internet to this tribe — and with it, the ability to experience life outside their closed ecosystem. Since then, as reported by the New York Times, many have purchased cheap smartphones with government benefit checks. They use them mostly to play games, communicate with friends and family outside their remote encampment and scroll social media sites.

Image courtesy of The New York Times

Some Marubo villagers, mostly the younger ones, use their newfound connection to the internet to monetize their skills, leveraging apps to connect them to a new world of potential customers. Others see it as a one-way ticket to a new life away from the tribe.

It’s reported that elder members of the tribe worry about the internet’s potential to distract younger members from doing their daily chores, including essential ones like hunting food for dinner. (Elder disdain for mobile phones and apps must be hard-coded in human DNA.)

But even they say, “Don’t take away our internet.”

The New York Times reports that there are 66,000 active Starlink contracts throughout the Amazon rainforest in Brazil, which connects 93% of the cities, towns and villages that dot its riverbanks. Solar panels provide the power needed to operate the satellites and deliver the world to the people living there.

Today, about a third of the world’s population remains offline, including 5% of the U.S. population living in rural areas for which there is no internet coverage. The ability to provide low-cost, fast and reliable service to remote parts of the world creates the foundation for a truly global, digital and connected economy.

It’s amazing, but only the first step to their digital transformation — and that of the global economy at large.

The Connected Economy Journey

Three decades after the start of the commercial internet, most of the world is connected to it — and most people have mobile devices that enable access to it.

Yet the world remains in the very earliest innings of realizing the full potential of the connected economy that consumers and businesses say they’d like to have, that business leaders and innovators say they are committed to delivering, and that I have been writing about since January of 2020.

Too much of the digital transformation to this point is digital — but not exactly transformational.

Yes, we have apps that allow us to start a transaction in the online world and fulfill it in the physical world. We can keep up with friends on social media, impulse buy on TikTok or Insta and one-click checkout on many mobile and online stores.

Consumers have more opportunities to skip the physical world altogether by streaming concerts, or by interacting with their friends inside of their game consoles in their living rooms. They can now cash or deposit paper checks on their mobile phones instead of standing in line at their traditional bank. And they can find a date without going to crowded bars.

These experiences deliver extraordinary convenience because apps and mobile devices have shifted those time-consuming activities online.

Creating experiences that connect discrete digital activities within new connected ecosystems is a work in process. Truly making the physical world a contextual part of a digital experience remains largely untapped.

Too much of the digital transformation to this point is digital — but not exactly transformational.

It’s one of the greatest opportunities for innovators and business leaders to seize as they write their strategies for the rest of this decade and well beyond.

That’s particularly true for some of the largest segments of the global economy like healthcare, retail and financial services, where innovations that fully integrate the on and offline worlds will be necessary as access to (and the cost of delivering) a skilled workforce faces enormous pressure.

The Connected Economy in 2024

On Wednesday, June 26, 2024, PYMNTS Intelligence will release the results of a landmark global benchmarking of the digital engagement of consumers living in 11 countries that represent 50% of the global GDP. The How the World Does Digital report includes the U.S. and the U.K.; the five largest EU countries — France, Germany, Italy, Netherlands, and Spain; and Australia, Japan and Singapore in the Asia Pacific.

The nearly 60,000 consumers studied in 2023 are statistically representative of about 800 million people living in those countries. The report analyzes the digital behaviors of this population across 40 different activities involving how they work, live, pay, shop, eat, stay well, have fun, communicate, travel and bank. 2023 is the third year in which PYMNTS Intelligence has conducted this global study; some 180,00 consumers have been studied, all told.

What we present in this report is a snapshot of the connectedness of the global economy at this moment in time for the activities that are done digitally by people in these countries.

We know that these 40 activities will expand as more physical-world activities become part of the digital transformation of the global economy. What we present in this report is a snapshot of the connectedness of the global economy at this moment in time for the activities that are done digitally by people in these countries.

In 2023, we find that just about everyone was engaged online or via their mobile devices in at least one of those 40 activities monthly. We think that’s important, especially given the geographic diversity of the populations studied.

Not to mention the fact that consumers, en masse, left their homes to transact more in the physical world last year. That’s why we consider the 2023 report critical to understanding the global, digital landscape and how it is evolving.

We find — ironically, perhaps — that the common activities across all the geographies studied are largely identical to those that the Marubo tribe members gravitated to immediately upon their newfound access: playing games, messaging friends and family and hanging out on social media sites.

Those activities have been part of the digital landscape ever since mobile phones and apps became a part of our lives in 2007/8 and digital devices purpose-built for gaming and computers capable of connecting to the internet provided access to gaming and social media years before.

Those user experiences have improved over time because competition for attention and eyeballs cause developers to double down on innovative experiences — and because there are existing networks of people and businesses to connect with.

There are many places, though, where we find digital engagement either lacking or waning for one of three reasons:

The generational digital divides are enormous everywhere.

Many digital activities that could be adopted aren’t probably because the clunk isn’t worth the squeeze.

Regulators and lawmakers have imposed requirements on providers that degrade the appeal of a connected experience that consumers like and use.

It’s Not Your Grandma’s Connected Economy

I doubt many of you would be surprised to learn that Gen Z is way more digital than their parents and grandparents, regardless of the country in which they live. More than twice as engaged, in fact.

Maybe some of you might be if I said that there isn’t that much of a difference in how Gen Z and Boomers living in those 11 countries use digital and mobile channels to do their banking.

But I am willing to bet that very few of you would correctly guess which country of the 11 has the most engaged Gen Z population. It’s a shocker. I’ll keep you in suspense until Wednesday. Let’s just say that it offers a clear imperative for how to address some of the economic issues facing that country.

I am willing to bet that very few of you would correctly guess which country of the 11 has the most engaged Gen Z population.

It’s a shocker.

If you have a guess, reach out to me on LI and I’ll give you a thumbs up or down on what you pick.

And therein lies one of the biggest impediments to delivering a fully connected global economy — getting all members of the population on board, especially the older generations. It’s something that will become more necessary as people live longer and have more of a need to stay connected to the physical world using digital methods.

One way to clear that path is through a wholesale reset of the one activity that almost no one in our study engages with digitally anymore — but almost everyone does at least a couple of times a year in the physical world.

Going to the doctor.

The Prescription for a Healthy and Connected Economy

Like me, I am sure that many of you used a telehealth provider during COVID. It was the only way to see a doctor at one point during the pandemic, and a preferable one even after the pandemic began to subside.

Today it remains one of the most underused digital activities, globally, for some of the same reasons that you probably haven’t had a telehealth appointment in the last year: It has a pricey copay, and often you end up having to see the doctor anyway.

It’s a massive part of the global economy waiting to be transformed.

Boomers and seniors use it very little, preferring to visit the doctor’s office. They have the time and want the reassurance of being seen and examined there. But that’s largely because there is no digital alternative that they — or anyone else according to our study — trusts to be as good or better.

Patients can use digital channels to access their medical records, make appointments, order prescriptions and have them delivered and pay their bills. The lack of access to diagnostic devices in the home that measure (and monitor) vitals make telehealth an unsuitable alternative to seeing a doctor in person right now.

It’s a massive part of the global economy waiting to be transformed.

The Voice Doesn’t Necessarily Have It

There are apps and connected devices for the home to control the lights, temperature, curtains, door locks and garage doors, and smart ovens that expertly cook food. Aside from the tech enthusiast early adopters, most consumers don’t use them. Many of these devices are still hard to use, don’t feel essential, and are expensive to boot.

Voice plays a big role in enabling a smart and connected home experience. Although voice-enabled speakers occupy the kitchen countertop and living room end tables in a small portion of the homes of the consumers studied, most don’t use them or even as much as they once did.

Perhaps that’s because more people are out of the house and back at work. Or most people find that there’s a gap between how people would like to use them and their capabilities today. Right now, they are a long way from the Gen AI-powered assistants we’re being promised, the ones consumers say they would even pay to use.

When Regulators Rain on the Connected Economy’s Parade

One of the more common digital activities across the 11 countries in the study is the use of gig platforms to get rides and order restaurant food, groceries or retail items for delivery to their homes on demand. These platforms have built their businesses by matching and monetizing customer demand with driver supply at price points that consumers and drivers find acceptable. They rely on people with some spare time, and vehicles with some spare capacity, at the right time to match up with people and businesses that need something delivered. They are the glue that neatly binds the digital and physical worlds.

Many of these platforms have also created connected experiences within them. Uber now reminds me that I can order food from Eats while at the airport waiting for my plane, and at the hotel when I land — right after reminding me to book my ride back to the airport the day I am scheduled to fly home.

Unfortunately, some countries have labor laws or other regulations that make it difficult to use people who would like to supply their services part time when they are needed this way. Other countries and cities are adopting regulations, including minimum wage laws and requirements that gig workers be full time. That makes it hard to give work to people who have unpredictable portions of their time available to do these jobs.

The reclassification of gig workers as employees has resulted in higher prices for consumers, and fewer trips (and tips) for the drivers.

This has been a real problem in many European countries and is becoming an increasing one in the U.S. The reclassification of gig workers as employees has resulted in higher prices for consumers, and fewer trips (and tips) for the drivers. According to the Wall Street Journal, Seattle will roll back its requirement to pay gig workers minimum wage after reports that Uber Eats orders dropped 45% last quarter from a year ago (and obviously so did driver pay). Drivers may be making more on an hourly basis with the new minimum wage requirements, but taking home less since there is a diminishing demand for their services.

New York is the latest State requiring gig platforms to pay workers a minimum of $19.56/hour, up about $16 from the end of last year. Massachusetts has it on the ballot. Platforms are passing on the extra costs to the consumer as a surcharge — it’s either that or run in the red.

That will make the gig experience — which consumers all over the world like and use — more expensive and less accessible thanks to government regulation.

The Connected Economy’s Path

One of the big takeaways from the 2023 How the World Does Digital report is the huge potential for embedding digital into the day-to-day routine activities of consumers regardless of where they live — including the once-isolated parts of the world. With connection comes innovation and the opportunity to expand people’s economic wellbeing.

Since 2020 we’ve fast-tracked our shift to digital, whetting the appetites of an enthusiastic consumer with access to the connected economy, and making the transition between the physical and digital worlds seamless, secure and always on. We’ve seen innovators use technology and payments to power new experiences, laying the foundation for the transformation that is on the horizon.

On Wednesday, you’ll get the full scoop — and the big reveal of which country is the most digitally connected one of those we studied. And where, across all of them, the opportunity to innovate — no, transform — those experiences is waiting.