Digital Divide More Economic than Ethnic

The biggest gap in Internet adoption rates in the US exists between rich and poor, not between ethnic groups, according to research by Jupiter Communications. Less than half of US households with average incomes of less than $15,000, which represents 19 percent of the total US population, will have entered the Internet population by 2005.

According to Jupiter’s report “Assessing the Digital Divide,” the wealthiest households (with incomes of more than $75,000) will continue to represent the biggest single segment, with 15 million such households online by the end of 2000. That figure will approach 20 million in 2005. The poorest segment (incomes of less than $15,000) will represent only 3 million online households, growing to 9 million by 2005.

Jupiter’s report admits there is a pronounced gap in US Internet usage among various ethnic groups, although projections indicate that this gap will close significantly by 2005. Currently, 60 percent more white households are online than African-American households are. While African-American and Hispanic-American segments have the lowest Internet penetration, at 30 percent and 33 percent in 1999, respectively, they have each exceeded critical mass. African-American households will reduce the access gap by two-thirds by 2005, when only 18 percent more white households than African-American households will be online.

“For the Internet to be a true mass medium, it will have to achieve higher penetration among all consumer segments,” said David Card, senior analyst with Jupiter Communications. “However, the critical-mass penetration achieved by even the under-penetrated segments should encourage businesses that target online consumers with affinity programming strategies. These relatively small markets can generate revenues for content and services targeted at specific communities.”

US Online Population at the End of 2000
African-American 4.6 million
Hispanic-American 3.8 million
Asian-American 2.2 million
Kids (2-12 years old) 14 million
Teens 13 million
College Students 12 million
Seniors (50+) 23 million
Source: Jupiter Communications

Jupiter forecasts that 4.6 million African-Americans households will be online by the end of 2000 compared with 3.8 million Hispanic-American households, and 2.2 million Asian-American households. Each of these demographics will grow at double-digit rates annually for the next five years.

Significant differences exist among various age groups, with kids (ages 2 to 12) and seniors (ages 65 and older) lagging behind the national average in online penetration. This gap will narrow in the next five years, with kids’ penetration increasing from 32 percent in 2000 to 62 percent by 2005. Senior penetration will increase from 16 percent currently to 48 percent by 2005. However, adults ages 50 and older will account for 23 million users by the end of 2000, comprising a market larger than that of any of the youth segments: kids (14 million), teens (13 million), or college students (12 million).

A study by Forrester Research came to a similar conclusion. It found that regardless of ethnicity, consumers use the Internet for the same reasons and to accomplish the same tasks. Although Asian- and Hispanic-Americans use the Internet more than African-Americans, the racial dividedisappears onlineand ethnic groups exhibit the same behavior.

In 1999, connectivity to the Net from home increased by at least 11 percent for all ethnic groups,” said Ekaterina Walsh, Ph.D., analyst at Forrester. “In fact, Internet penetration among Asian-American households matches that of mass consumer technologies like cable TV, while Hispanic-Americans are 9 percent more likely than Caucasians to be online.”

Ethic background alone does not explain the existence of a digital divide, according to Forrester. Although a combination of factors determines if a consumer is online, income is the strongest predictor — across all groups, online penetration rises as income rises. Other drivers of Internet use include age, education, and technology optimism.

Forrester found that regardless of ethnicity, consumers use the Internet for the same reasons: communication, access to information, entertainment, and shopping. Two-thirds of online ethnic group members cited as email as the primary reason for getting wired. Examination of online purchases by ethnic groups reveals that all consumers progress almost in lock step through a retail adoption cycle–buying convenience items the most, researched products second, and replenishment goods the least.

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