For digital economy to deliver on it's promise we need to avoid technological determinism and put people back at centre as the recipients of economic change
Prime Minister Modi waving during the launch of Digital India
Source: Scoopwhoop
The proposition that the digital economy is going to deliver development, prosperity and growth has become almost conventional wisdom among policy makers, economists, and innovators alike.
Unsurprisingly, the theme for the India Economic Forum underway this week in Delhi is the role of digital transformations, particularly a digital economy, in promoting inclusive growth. A recent Deloitte report suggests that if the Modi government’s ‘Digital India’ plan can increase broadband penetration across India by 50% and mobile penetration in rural India by 30% in the next two years, this could contribute towards a 9% increase in GDP; by 2025, the Digital India plan could boost GDP to $1 trillion. The World Bank similarly argues that a 10 % increase in mobile and broadband penetration can increase the per capita GDP by 1.38% in developing countries.
Can the digital economy deliver on its promise? Undoubtedly, a digital economy can lead to more trade, better capital use, and greater competition. It can promote efficiency and innovation as well as provide an inclusive platform for economic participation. Too often however, narratives on the role of the digital economy are characterised by technological determinism – a sense that technology is the natural and necessary solution to a number of complex social problems, a quasi-natural force, impervious to human choice and action, that will autonomously deliver social change.
At a conference last year, minister for communications and information technology, Ravi Shankar Prasad, stated that ‘India is developing on its own’ – the how and why of this was attributed to increased internet penetration. Silicon Valley entrepreneur Elon Musk’s promotional video for the SpaceX-Mars mission narrates how life has evolved from a single cell organism to complex multi-cellular beings, from amphibian to mammal and that the next necessary step in this evolutionary process is the technology enabled inhabitation of Mars – to stand in the way of man, technology, and Mars, would be to stand in the way of evolution. Technology is then seen as an almost magical force whose wide-spread application and use can automatically contribute to development and progress. But, this kind of deterministic narrative blinds us to the very real and tangible human interventions that must be made for the digital economy to promote inclusive growth.
The digital economy can accelerate development and growth, but it can equally exacerbate existing social and economic inequities. This is borne out by the numerous digital divides that exist today. Currently only 40% of the globe has digital access. A McKinsey report suggests that about 75% of the offline population is concentrated in 20 countries, and is disproportionately rural, low income, elderly, illiterate, and female. A study by the World Economic Forum highlights that in India, only 15 of every 100 households have access to the internet and there are only 5.5 mobile broadband connections for every 100 people. Unless we can provide universal access to all, the digital economy will benefit only a few, exacerbating inequities between the digital haves and have-nots.
But the digital divide is not only about access. It is also about the degree and quality of participation among those who are already online. According to a Boston Consulting Group study, the percentage of women internet users in India is approximated at only 29%; the remainder 71% is men. A paper analysing Twitter feeds in India concluding that women were significantly underrepresented in political conversations. Almost 85% of the user generated content indexed by Google comes from the US, Canada and Europe. This mirrors the trends in academic journals; knowledge production in the digital world is thus led by a select few, belonging to specific geographies. It should be clear then that the digital world is in fact mirroring the inequities of the physical world.
Digital empowerment
Addressing this divide requires providing universal and affordable access to all. The private sector has a necessary role to play as it invests in the backhaul infrastructure for digital connectivity. But the emphasis must be on promoting government backed structural solutions rather than private sector commercial ventures alone. This would include dismantling the monopoly control over international gateways, liberalising domestic markets for building and operating physical infrastructure networks, and creating robust regulatory frameworks that check for policy capture by private sector monopolies. Commercial solutions such as Facebook’s Internet.Org can provide affordable access, but with a high cost to net neutrality; whether Google’s Project Loon that uses wi-fi balloons will impose the same kind of restrictions is yet to be seen. Access also must be balanced with concerns about data integrity, privacy, and security. While questions about data usage and privacy, the uses and misuses of big data, and the threat of cyber-crime are poorly understood even by the average internet user, the challenge for navigating the complex web of terms and conditions and availing of adequate privacy measures is likely to be even more pronounced for those with little basic education.
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