Mckinsey’s e3 index
The e3 index is used by McKinsey to measure a country’s Internet connectivity based on 3 key components of e-nvironment, e-ngagement and e-xpenditure. A very well thought of bucket that lists 17 indicators within them that are a proxy to measuring the Internet connectivity.
The components might be good to study the current setup, however, might fall short when expected to predict future trends. One key indicator which could or rather should be taken into consideration are the number of companies whose primary offering is internet product/services.
If India as a country has come a long way since the 80s, much of the credit goes to the information technology companies built on the first wave of outsourcing. These companies have gone through phases of learning, adapting to emerging technologies and global needs and are now finally in their mature phase – innovation. They have played a pivotal role in bringing the Internet to every household and making it a bare essential. India now has roughly 120 million Internet users and this is just the beginning of the explosive Internet growth we will see in the coming years. The dream would be to see access to Internet as a birth right as in some parts of the world.
But getting back to the indicators, it is important to account for Internet companies when we try to study current and future growth prospects. A new component ‘E-nabler’ should be used under which we take indicators such as number of established companies that define their services under information technology, internet start ups that are coming into existence every year, number of people who are employed under such companies or startups, VC fund or private equity funds that are set aside for information technology space, foreign investments made in this space each year, etc.
E-nabler will see growing importance among the currently listed components as a metric to study the current Internet setup and also to predict the future of the Internet ecosystem.
– Prashanth Pattabiraman
Mckinsey’s e3 index