The shift from personal computers to smartphones for internet access has expanded the digital economy to a much wider segment of society.
Two inspirational companies - a young start-up and one with a social mission - provide examples of how the digital economy can bridge the socio-economic divide.
An entrepreneur in every home
Every homemaker is the executive chef for the family, and usually boasts of a signature dish (or dishes). However, this expertise is limited to family and friends. Holachef, an online catering service, has an interesting business model that provides every homemaker with the opportunity to be a chef.
Individuals sign up to get their dishes and kitchens certified by the company, which then sources fresh meals from these chefs on a regular basis.
Customers log into an app to choose from a varied menu of freshly cooked meals sourced locally from these neighbourhood chefs. Analytics on consumer feedback, popularity ratings and the number of dishes sold help customers make informed choices. The overall value proposition is compelling.
Customers get access to a wide and constantly-changing variety of reasonably priced, wholesome home-cooked meals while every neighbourhood homemaker has the opportunity to monetise her skills and become a master chef in her own right.
Anyone who has lived on their own in a big city can relate to the appeal of a fresh, home-cooked meal, and this financial and social empowerment of homemakers can have a positive impact on our society.
Solving the scale-up puzzle
Scaling up is one of the hardest missions to accomplish for political parties and businesses alike. It's no secret why most brick-and-mortar businesses have difficulty transforming from local to regional or national operations.
The biggest challenges for any growing business are:
1) The ability to reach new markets, and
2) Cost-effective distribution of their products and services in these new markets.
Online marketplaces like Amazon, eBay, Flipkart and Snapdeal provide digital solutions to help companies overcome these challenges. Digital platforms provide global visibility for the products and enable product distribution and payment realisation in geographically distant markets.
An artisan from a remote town in India can market and supply his products across the country and even internationally, while realising higher prices through a direct connection with customers. The customers benefit from wider product choices and lower prices as compared to a multi-level retail distribution structure.
An additional benefit for small businesses is a potentially dramatic reduction in input costs by using digital marketplaces to eliminate middlemen. For example, Snapdeal's newly launched Agri Store enables farmers to source tools, seeds and fertiliser at significantly lower costs, providing a ray of hope to escape the clutches of debt trap.
What lies ahead
At the Nasscom India Leadership Forum 2015, Snapdeal CEO Kunal Bahl outlined his vision to onboard one million small businesses to its marketplace platform within the next three years.
The company already supports 100,000 small businesses with women accounting for one third of these entrepreneurs.
In its recently published report (India@Digital Bharat), BCG projects a $200-billion internet economy in India in the coming years - equivalent to 5 per cent of GDP. Clearly, the digital economy is strongly democratic and has the potential to be a positive force for change. However, to ensure that these benefits penetrate all socio-economic layers of our society, we must overcome the barriers of access, opportunity and knowledge to take full advantage.
In order to advance this progress, a compatible union between digital and niche enterprises is necessary - one that can create a formidable partnership enabling India to make use of the full potential of the internet.
Public-private partnerships in initiatives like Digital India and Smart Cities are critical enablers for unleashing the economic potential of India through the digital economy.
Through these types of partnerships and collaborative efforts, we can truly bridge the existing gaps.
(The author is Vice-President and Head of Digital One, Syntel, Inc.)