[bangkok post] Increasing Internet penetration not only accelerates economic growth but also improves social welfare while poor technology readiness will affect Thailand's competitiveness and attractiveness to foreign direct investment according to a study entitled "Towards A Connected World - Socio-Economic Impact of Internet in Emerging Economies" by the Boston Consulting Group which was commissioned by Telenor.
The study, which covers Thailand, Bangladesh and Serbia, indicated that under the right conditions and with the right regulatory environment, Thailand could have 17.9 million Internet subscribers by 2020, approximately 26 subscribers per 100 inhabitants. At the household level, 70 percent could have at least one Internet subscription, whilst business adoption could lie around 91 percent in 2020.
Overall contribution to GDP from the Internet in Thailand is expected to be 3.8 percent per annum in 2020. The key driver of this is the productivity gains experienced by business users in all industries, which reaches 4.9 percent for service firms and 2.4 percent for manufacturing firms. This allows them to contribute 1.9 percent and 1.2 percent to GDP, respectively.
The Internet could potentially increase the number of new businesses created each year by up to 52,000 in 2020, which corresponds to 114,000 new jobs, of which only 11,000 are projected to be created within the Internet value chain.
This economic activity will also generate revenues for the government, expected to amount to 4.2 percent of total government revenue during the 10 year period 2010-2020. Almost 90 percent of this tax is expected to come from corporate taxes on the users of the Internet, while only 13 percent will come from taxes and fees paid by the providers themselves.
This highlights that the Internet is a capital good that enables increased production across the economy. High taxes on the provision of such services, although they might seem lucrative in the short term, will ultimately stifle development of the Thai economy.
Study spells out Net benefits