Dec 04, 2016, 15.09 PM IST | Source: Moneycontrol
We need 1.2 billion people going digital to ensure greater economic prosperity
Lunchtime in Mumbai is a sacred affair. In a city where time is money, there is a highly efficient distribution system to deliver lunches to office-goers known as the dabbawalas. An institution on its own, fabled for their legendary accuracy, they have partnered up with one the country’s largest e-commerce retailer Flipkart to deliver packages as well.
This harmony of old and new is how the subcontinent deals with many of its problems. Hosting 18% of the world’s population comes with its own set of problems. Income disparities are high with 10% of the richest Indians owning nearly three-quarters of the total wealth. However, there have two paradigm shifts which could bring about an equitable difference in the years to come. Mobile penetration is at an all-time high. At the end of June 2016, India surpassed the United States as the second largest country of mobile users according to a report by GSMA. Falling data rates, cheaper devices and better connectivity have been fundamental in making the country the second-largest mobile market.
Secondly, India’s internet usage is largely via mobile. The growing number of internet users has spurred investors and entrepreneurs to create a new digital economy. As a consequence, the world has been paying a lot of attention to India. Home to 4,000 startups, the country lags behind only the US and the UK. The previous year alone has attracted $44 billion in foreign direct investment of which a major chunk was directed towards the services sector possible only with an educated populace and the Internet.
Notably, among foreign investors, any conversation about India would draw comparisons with China and for good reason. Like India, China is a rapidly growing economy with a large youth population where the internet and smartphone boom changed sectors altogether. It’s protectionist nature led to the mushrooming of home-grown Internet companies, payment systems, search engines and messaging apps. Though China dwarfs India in comparison with trade and the economy, there is a lot of potential. India is the second largest mobile market with just 17% of penetration whereas China user penetration is 46%.
In other words, India’s journey is just beginning. However, the question to be asked is what is holding the country back.
For starters, e-commerce and other internet companies have treated India as “one” market which is a fallacy. Ideally, they cater to an English literate populace drawing a salary of at least more than Rs 25,000 a month which is no more than 15% of the total population. This and any segment above are the ones who can, after meeting their monthly expenses, afford to buy things they don’t need at discounts they cannot ignore. With funding drying up and the focus shifting to sustainable and profitable growth, these companies are trying to consolidate and improve efficiency.
While the trimming of fat is much required, there also exists another India; one that is clawing its way out of poverty and the other still shackled to its ills. It is here, in the far-flung hinterlands, where technology is needed the most. And not just technology. Technology is designed by human beings with a particular intent and capacity. If the whole of India were suddenly connected, it would not eradicate poverty overnight. Applications need to be designed towards the lower socioeconomic strata. They won’t find much meaning with a Flipkart or Uber, but timely weather updates via Kisan Sanchar, online encyclopaedias, job alerts via eduVARTA, healthcare and e-governance schemes like WOSCA can fundamentally alter their lives.
Sensing the vast opportunity waiting to be unlocked, the Indian government has launched a “Digital India” initiative with the aim to get every Indian online. There is a renewed focus to improve the digital infrastructure necessary to meet this goal. The government has even directed its attention towards the Internet of Things (IoT) to study more and devise solutions for the country’s myriad issues. The report by the Department of Electronics and IT estimated that the IoT industry though nascent in India is expected to grow to Rs 940 billion by 2020 with widespread applications from agriculture, healthcare, manufacturing to power and even space.
There is another aspect of digitisation that does not get spoken too very often. Over the past three decades, India has developed into the technology hub for the world. Driven by the outsourcing and offshoring success of homegrown companies, India is renowned for the technological acumen. Now, if Indian companies can help transition foreign economies, why not use the same power here itself?
In the end, empowering the common man will need a concerted effort by all the stakeholders involved. If we are to realise a digital economy and reach our potential, we cannot ignore digital inclusion.