South Asia’s emerging digital transformation

Relevance: Digitization and its benefits, scope, issues and way forward

Synopsis: Adoption of digital technology has increased manifold during the pandemic, and it will continue its upward trajectory. An analysis of the issues involved with digitization and how South Asia can leverage its potential to come out of economic stagnancy.

Context

Covid-19 has forced South Asia to take a quantum leap in digitization. The shift to remote work and online education has led to rapid increase in internet penetration. Even a small nation like Nepal recorded almost 11% increase in internet users. For a region with an inadequate public health infrastructure it acted as a watershed moment providing novel solution to the public health crises.

Impact of Covid 19 on digitisation

1. Accelerated launch of National Digital Health Mission – In India, COVID-19 accelerated the launch of the National Digital Health Mission, enhancing the accessibility and the efficiency of health-care services by creating a unique health ID for every citizen.
2. Increased adoption of E-commerce – The pandemic-induced lockdown spurred South Asia’s embrace of e-commerce, boosted by digital payment systems. For instance, Bangladesh alone witnessed an increase of 70-80% in online sales in 2020, generating $708.46 million in revenues.

Why digitization is key for India and South Asia?

Digital transformation through advanced technologies such as cloud computing, artificial intelligence, the Internet of things, Big Data, etc., will become  key to success in future and thus role of digital technology can not be overlooked.

• Economic growth – Adoption of digital tech will drive post-pandemic growth in South Asia, including India.
• Business opportunities – digitization will provide new business opportunities and access to larger markets
• Create employment – In India, e-commerce could create a million jobs by 2030 and be worth $200 billion by 2026
• Poverty reduction and financial inclusion – Fintech could drive significant growth and reduce poverty by building financial inclusion

Problems with digitization 

1. Lack of access – Despite having the world’s second-largest online market, 50% of India’s population are without Internet, 59% for Bangladesh and 65% for Pakistan.
2. Gender divide – 51% of women in South Asia got excluded from social security measures due to lack of access to internet.
3. Exclusion of children – According to UNICEF data 88% of children lacked access to Internet powered homeschooling which can create other problems such as increase in out of school children, place girls at risk of early marriages, can push poor children into child labor
4. Impact on businesses – Many South Asian firms failed to embrace e-commerce or other cloud-based technologies to survive the financial problems of the novel coronavirus pandemic. The region recorded a 64% decline in sales, with small and women-led firms impacted the most.
5. Creating unemployment – With increased pace of digitization due to Covid crisis, the acute skill gap among the youth will create problem of unemployment.

Digitisation in South Asia: South Asia has also made significant strides in the adoption of digital technologies.

• The Digital Bangladesh Vision 2021 envisages transforming Bangladesh into a prosperous, digital society
• India’s JAM Trinity (Jan Dhan, Aadhar and Mobile) systems intend to improve the efficiency of welfare programmes through digital innovation.

However, the region still has a long way to go.

Measures/Suggestions

1. Addressing legal and regulatory issues -South Asia needs to address legal, regulatory and policy gaps as well as boost digital skills
2. Boosting digital infrastructure – A robust digital infrastructure is a sine qua non
3. Increasing Funding to the sector – public private partnership needs to be leveraged for the region’s digital infrastructure financing
4. Regulatory roadblocks need to be addressed – as e-commerce regulations are weak in South Asia
5. Other issues – such as customer protection, digital and market access regulation, etc. need to be addressed
6. Addressing digital illiteracy and skills – Governments and businesses need to come together to revamp the education system to meet the demand for digital skills and online platforms
7. Stringent cybersecurity measures – needed to protect data of the users.
8. Cooperation among countries: Roadblocks to digitization could be effectively addressed, drawing inspiration from recent cooperation among South Asian countries against the COVID crisis. To fight COVID, South Asian countries collaborated with various initiatives like contributing towards a COVID-19 emergency fund, exchanging data and information on health surveillance, sharing research findings etc.

Conclusion

Collaboration at all levels is needed to push South Asia out of stagnancy and towards a digital future of shared prosperity. A shared “digital vision” could place the region on the right track towards the Fourth Industrial Revolution.

Terms to Know:  

• ASEAN
• National Digital health Mission (NDHM)