Recently, my daughter questioned the point of studying science when there was ‘nothing to invent’. After some parental panic, her words almost made sense. Historically, we invented ‘things’, but the digital age is about harnessing data and IT capabilities to invent ‘solutions’. It is the potential of this data and IT combine that has driven the value of the top eight US tech companies to $2.4 trillion — higher than India’s GDP.
In launching the Digital India initiative, Prime Minister Narendra Modi recognises two facts about the digital ecosystem: That India must emerge as a leader and that it is integral to achieving the broader agenda of development, the Make in India initiative and improved governance.
The Internet of Things (IoT) has changed our lives. The poster-child of this ‘smart and interactive’ world is the iPhone. The impact of the ‘Industrial Internet of Things’ (IIoT) — changing our industrial and societal structures and re-rating countries — will dwarf the influence of the IoT.
IIoT has been much studied by international organisations like the World Economic Forum, with most admitting that we are grazing the surface of its potential. Industrial processes will become more efficient. Over time, the world and India will move towards the ‘outcome economy’.
The real numbers reflect the growing impact of the digital ecosystem. With more than 3 billion Internet users, the Internet’s role in global GDP is expected to increase beyond 50% and contributing, on an average, over 7% to the GDP of G20 countries.
Of the four key elements of the digital ecosystem — global commons, government, business and individuals — government is critical for India. It ensures access for business and individuals, and represents India’s interests on the global commons. Government provides the regulatory framework to help develop the digital ecosystem, ensures that it benefits the wider populace and minimises negative social impact. It also has to defend against cyber-attacks.
Supportive regulatory framework — the constantly evolving digital ecosystem needs a regulatory regime that is ‘broad-based’ and dynamic, with some key essentials: universal access — no access barriers into the digital ecosystem; encouraging innovation, avoid over-regulation — to emerge a winner, regulations must promote new activities rather than to constrain them. Clear and broad standards of behaviour must be set and enforced; nurture inter-linkages — cross-industry, cross-platform, cross-discipline and cross-operator access is key to developing a real ‘ecosystem’; data security and personal privacy — Google et al is valued for the information they have about us. Hackers steal this information and, therefore, rules are needed to protect proprietary information and personal data.
Jobs will change under the influence of geography-agnostic supply-demand, process automation and a greater role for IT even in areas like medicine and law. We expect major disruptions in the nature of employment, including an increase in ‘credential inflation’ as automation reduces mid-skill jobs. The youth and those at risk of redundancy by automation need to be trained with the right skills. Major investment is needed in vocational education and to ensure change in curriculum to reflect the evolving digital ecosystem.
Bill Clinton had rightly recommended that the private sector should lead global e-commerce. Government should be a facilitator, not a major participant, neither crowding out, nor unnecessarily subsidising private initiatives. The government-investment approach needs to shift from being institutional to one that is project delivery-based timelines and budgets.
Government has to leverage the opportunities that the digital ecosystem provides to SMEs, women and rural India. SMEs, especially rural enterprises, can overcome geographic limitations, multiply the impact of marketing, improve customer interactions, and grow — creating employment. Government investment in the seed capital of new research-based initiatives can help develop many Silicon Valleys. Scholarships can also make a positive impact.
With instances like Iran’s paralysed nuclear plants by an Internet virus and China repeatedly attacking US networks, India cannot afford weakness in its cyber-security. Lack of centralised cyber-security initiatives, use of personal emails and devices by the government and a general lack of risk awareness leave us vulnerable.
A generalist approach to cyber-security, exemplified by pronouncements about planning to ‘push cyber-defence’, is inadequate and hints at a lack of urgency.
In Star Trek terms, let us man battle stations: Strategically plan cyber defence competency, spanning both cyber defence (protecting defence, key infrastructure, financial system, etc.) and research into cyber offence abilities that can be deployed if needed; use in-house talent — our security forces have thousands of engineers. While not necessarily cyber experts, they can usefully recruit, guide and lead cyber security teams; cyber security chief — a leader heading an inter-domain council — with representation from key ministries and organisations. Getting our cyber security ‘ecosystem’ working across multiple government arms will be a great start to Digital India; engage internationally — strive for agreements that limit the possibility of unnecessary cyber-warfare.
Saket Misra is a banker based in Singapore. The views expressed are personal.