First published in Enchiridion 2018 Magazine.
Digitalisation has brought numerous benefits globally, including lifting millions of people in emerging economies into the consuming class. But it also has had an impact in some sectors like manufacturing in advanced and developed economies. Today the sectors that are highly digitised are, financial services, media, and the technology sector which tend to be among the sectors with the highest productivity and wage growth. On the other hand, certain sectors are much less digitised, including healthcare, education, and retail which are the largest contributors of the economy in terms of GDP and the lowest-productivity sectors.
The companies that are digital leaders in their sectors have faster revenue growth and higher productivity than their less-digitised peers. Rapid technology adoption can unlock huge economic value, even as it implies major need for retraining and redeployment of labor. However, the value of digitisation that is captured depends on how many people and businesses have access to it. Today, more than 4 billion people, or over half of the world’s population, is still offline.
Just as steam engine and electrification, revolutionised entire sectors of the economy from the 18th century, so the Internet, robotics, artificial intelligence (AI) and data analytics are beginning to dramatically alter today’s industries. The increasing cost of advanced technologies means that the world around us is becoming ever more connected. In 2005, there were just 500 million devices connected to the Internet and today there are around 8 billion which will increase upto 1 trillion by 2030.
India’s journey so far
In July 2015, honourable Prime Minister Narendra Modi initiated the Digital India programme. The programme had been launched with an aim of transforming the country into a digitally empowered society and knowledge economy. The key Projects of Digital India programme were: Digital Locker System, MyGov.in, eSign framework, Online Registration System (ORS), Digitize India Platform (DIP), Bharat Net, Next Generation Network (NGN). Owing to the Digital India Programme the electronic transactions related to e-governance projects in the country had almost doubled in 2015. As per electronic transaction aggregation and analysis layer (eTaal), in the month of May 2018, citizens across India have made 246 crore e-transactions through various government portals
Over a decade, various Laws have been amended and initiatives were taken for facilitating ease of doing business in India considering Digital transformation as key aspects:
The Digital India Land Records Modernisation Programme (“DILRMP”) was launched by the Government of India in August 2008. The DILRMP is responsible for computerisation of records of rights and digitisation of cadastral maps both in urban and rural areas.
The Rationalisation of Forms and Reports under Certain Labour Laws (Amendment) Rules, 2017 which are required to be filed online on the Shram Suvidha Portal of the Ministry of Labour and Employment.
Pencil is an online portal that was launched on 26th September 2017 for creating better monitoring and reporting system to ensure effective implementation of the provisions of the amended Child Labour (Prohibition and Regulation) Act, 1986 and National Child Labour Project (NCLP) Scheme.
Centralised Services: All 120 EPFO offices have migrated to the consolidated database at the National Data Centre for seamless interface across the country.
E-biz platform: Employees’ State Insurance Corporation (ESIC) was the first organisation of Central government, to integrate its services (Registration of Employers) through e-biz portal to promote ease of business and curb transaction costs.
Launch of National Corporate Data and CSR Data Portals: This initiative is a significant step towards bringing accountability and transparency for corporate India.
Impact of digitalisation
The advantages of digitalisation include customer experience, technology push, and Economic benefits. Further, it also has advantages such as Digital Empowerment of Native Indian People, E-Governance, a Digital Identification which will verify the end user, bank accounts for Immediate Benefit Transfers of subsidies and payments, it will help in decreasing documentation which will help to protect the environment. Further, it will be a boost to both large as well as medium & small enterprises.
The disadvantages of digitalisation include Government employment may reduce which shall result in civil servants’ unrest, threat of security data breach, mis-appropriation of government data, data theft, impact on employment problem, cybercrimes. The main disadvantage of transferring all the government data to an electronic platform or system is that it shall lack the person to person interaction which is valued by a lot of people in our country.
The challenges of digitalisation in India are severe. The general drawbacks of digitalisation include lack of legal framework, inadequate privacy and data protection laws, civil liberties abuse possibilities, lack of parliamentary oversight for e-surveillance in India, lack of intelligence related reforms in India, insecure Indian cyberspace. Other challenges include improvement of IT Literacy, data vulnerability, excessive server hits, etc.
Threats to cyber security is an issue that is becoming increasingly important, given that almost all essential public services and private information are now online. The jobs of millions of people could be transformed by 2020. About half of all paid activities could be automated using existing robotics and artificial and machine learning technologies.
With cybercrime a growing threat, security should not just be the responsibility of the IT department. Prioritising security can, in fact, reduce operating costs. But despite the cost savings that improved security can bring, many companies need to rethink their approach to security. The prevalence of insider attacks, coupled with the growing number of devices, technologies and users accessing corporate IT systems, means that a shift is needed from traditional network control to ones that focus on protecting interactions among users, applications and data. Breaches of corporate security are inevitable, so the focus should be on protecting data. In addition, companies should consider further measures to improve security, such as using big-data analytics, ethical hacking teams or quantum computing.
Cybercrime in India surged approximately 350% under the Information Technology (IT) Act, 2000 from the year of 2011 to 2014. The Indian Computer Emergency Response Team (CERT-In), the national agency tasked with maintaining cybersecurity, reported more than fifty thousand security incidents in 2015. With the push towards digital transactions, this number will only grow with the passage of time. As smartphones become the preferred mode of transactions, hacking, phishing and malware based attacks are other serious concerns.
Digitalisation is creating more opportunities than ever before, but at the same time, it requires a new mindset and readiness to embrace change. Both companies and individuals need to accept the new reality of constant change to find a place in the developing digital world.
Digital technology will spread further, and efforts to ignore it or legislate against it will likely fail. The answer lies not in denial but in devising smart policies that maximise the benefits of the new technology while minimising the inevitable short-term disruptions. The key is to focus on policies that respond to the organisational changes driven by the digital revolution. While the digital revolution is global, the pace of adaptation and policy reactions will rightly or wrongly be largely national or regional, reflecting different economic structures and social preferences.
Given the global reach of digital technology, there is a need for policy cooperation like that of global financial markets. In the digital arena, such cooperation could include regulating the treatment of personal data, which is hard to oversee in a country-specific way, given the international nature of the Internet. The importance of cooperation also implies a role for global international organisations such as the IMF and World Bank. These institutions, with their broad membership, can provide a forum for addressing the challenges posed by the digital revolution, suggest effective policy solutions, and outline policy guidelines. The digital revolution should be accepted and improved rather than ignored and repressed. With good policies and a willingness to cooperate across borders, we can and should harness these exciting technologies to improve well-being without diminishing the energy and enthusiasm of the digital age.
Mr. Nitin Jain, Partner