With nearly 46 Million internet users and a growth rate of 7-8 per cent, India represents a digital economy, which has biggest market potential for global players. This digital revolution, also known as 'the Internet economy', is expected to generate new market growth opportunities, jobs and become the biggest business opportunity for businesses in the next 30 to 40 years.
Digital Economy in India
India has shown promise and proved leadership in the digital technologies over the past decade. It is time India's new leadership supports and fuels the digital economy to turn it into a major growth enabler. Prime Minister Narendra Modi's "Digital India" programme's mention among the top priorities for the government, is a welcome change and is a resounding nod to the digital opportunities.
Changing Public Policy to ensure Successful Digital Evolution
The launch of Digital India by the Prime Minister Narendra Modi, with the objective of connecting rural areas with high-speed Internet networks and improving digital literacy, digital revolution has already started happening in India. This vision of the digital India programme presented by the central government has resulted in inclusive growth in areas of electronic services, products, manufacturing, and job opportunities.
Key areas that have been positively impacted ensuring growth of the digital economy include:
- Digital Infrastructure as a utility to every citizen
- Governance and services on demand
- Digital empowerment of citizens.
- Also, while demonetization might have not made much impact, it has created a new conversation around digital payments - with not just fin-tech startups and the banking sector, but also the government itself taking steps to onboard the unbanked.
India is also leading the world in payment system evolution. Enablers like Jan Dhan, Aadhaar, mobile penetration, and more recently, demonetization have created favorable conditions for large scale adoption of digital payment systems in India. With mass adoption of digital and biometric systems by 2020, the country is expected to leapfrog plastic payment systems and have the most advanced financial systems in the world.
Key Trends - Digital Progression in India
The next leg of digital progression in countries like India will be driven by frugal innovation, open source software, local language computing, and scalable enterprise solutions for "smart" cities or villages. These are areas in which India has great potential and needs to strengthen infrastructure and train resources.
Automation, big data, IoT and artificial intelligence enabled by the application of digital technologies could transform the Indian economy and improve productivity.
Challenges to digital evolution
Connectivity/Infrastructure: The biggest challenge faced by digital evolution in India is the slow/delayed infrastructure development. Spectrum availability in Indian metros is about a tenth of the same in cities in developed countries. This might be prove to be a major roadblock in providing high speed data services. This digital divide also needs to be addressed to improve reach in rural areas. PPP models should be explored to enable sustainable development of digital infrastructure. Also government should incentivize startups for providing last mile connectivity.
IT Literacy: Improving IT literacy is a huge task which is extremely necessary for the digital services to catch up among the masses.
Security: Security of data, especially financial data, is a big concern. Digital medium is still relatively unsafe with data vulnerability and phishing attacks are a big issue in commercial and financial transactions and this need to be addressed through advanced fin-tech technologies.
Technology companies should adopt public-private partnership while trying to foster innovation in a digital economy like India. Also, they must encourage better integration of automation, data, and new technologies into the legacy economy. Steps must be taken to introduce skills required to thrive in a digital economy at early levels, specifically at schools.
India today aspires to be the leader on every global technology platform - strengthened by its vibrant private sector, expanding technology capabilities, entrepreneurial potential, and rich diplomatic history.
To build on to its legendary past and to maintain its leadership in IT, it's important that digital technologies are used to improve public services, develop efficient trade mechanisms and deliver financial inclusion through advanced fin-tech technologies.
All this can be achieved by leveraging the strong IT competencies of Indian technology companies and highly skilled Indian personnel having extensive experience with global corporations. The intent should be to deliver advanced digital solutions for the most intriguing problems of the country that make a difference to the economy.
(The writer is President of US operations at software development and consulting firm InterraIT)