Is Digital India A Game-Changer?

by Prashant Kulkarni - Mar 13, 2015 12:30 PM +05:30 IST
Is Digital India A Game-Changer?

Digital India is for the masses and if it manages to fulfill these aspirations, it will be a revolution and greatest accomplishment

Aside from seeking technological solutions for socio-economic challenges, Digital India is an opportunity for technology firms to penetrate the bottom of pyramid markets. Implied is an intersection of supply-side digital economics and what market leftist (oxymoron) phraseology might term as subaltern markets. Though Information and Communication technologies (ICT) applications exist towards economic advancement, successes are rare. Unsurprisingly, there is cynicism over Digital India.

Failures- Brief Overview

Exuberance and gusto often give way to adverse ground realities. Past disappointments, time and again, are ascribed to shortcomings in infrastructure and design, besides unintended user behavior.

Habitually, power scarcity accounts for non/under performance of ICT enabled tools. Solutions to power shortages repeatedly remain non-starter. Low cost devices running on longer battery lives or low power usage remain distant horizon for mass markets.

Prof. Negroponte’s idea of One Laptop per Child (OLPC) factoring both cost and infrastructural elements remains a mirage. Students might get a laptop, yet remain clueless on its productive usage. Furthermore, pedagogical thoughts are absent among teachers, parents and the local community in effective exploitation of digital kit. Teacher training in using laptops as instructive mechanism remain underwhelming. Students consequently are left without suitable guidance.  Fallout of the inability in designing contextual appropriate technology is the local socio-cultural milieu. Visibly, modest efforts happen towards designing programs orchestrating to local surroundings.

Technology is not deterministic; only a magnifier of human purpose.  Deeply entrenched caste and community structures and hierarchies make right of use difficult for poorer sections. Both anecdotal evidence and surveys do support the presence of these barriers in access.

Disparities subsist in capacity creation.  An educated youth from urban settings undeniably leverages ICT aided tools better in comparison to her less educated counterpart from the hinterland. A post graduate professional might leverage her LinkedIn contacts to heighten her professional standing more successfully than a rural farmer/entrepreneur. To that degree, criticism is legitimate.

Frivolous wishes time and again score over industrious uses. People frequently download music or films, master torrents or even access porn than focus on learning new practices of economic betterment when granted access.

Moreover, most rural/semi-urban internet centers suffer from high maintenance costs, insufficient revenues, raising questions over its sustainability. It is therefore enticing to conclude Digital India meeting the same fate as its predecessors. Doubting Thomases notwithstanding, potentially numerous outcomes can make Digital India a success.

Supply Side approach

It would not be erroneous to emphasize the presence of latent demand, hitherto not fructifying due to nonexistence of supply. As the broadband supply perforates, demand is obviously created.  Increased competition might see prices move southwards. Value creation happens not on the broadband but on the platforms facilitated by the broadband network.

Besides, the government is open to unorthodox means of supply.  It is apparently amenable to ideas like Google Balloon, Microsoft whitespace etc (nonetheless both in preliminary stages) signifying hurdles in means are not going to ruin the party.

Knowledge Spillovers

It may just be a photograph being clicked on a mobile camera or music being downloaded or film watched on YouTube, yet it echoes a commencement of a voyage of internet discovery. The journey entails exploration of many a facet of the internet. Knowledge thus gained spills over across the societal settings.  An agricultural expert advising a farmer on comparative efficacy of fertilizers is not just a conversation but formation of knowledge trickling across the neighborhoods.

The learning digital haves gain from their exposure will diffuse across digital have-nots. Perhaps the gap might amplify in the early phases; however is a passing period. The early adopters followed by the early majority will set in motion the learning curve thereby reducing costs of scholarship for the late majority. This fruition of the learning curve diffuses the demand side spillovers enabling the betterment of rural life.

Swift circulation of knowledge spillovers increases productivity of agriculture and rural industries thus augmenting incomes. Additionally, time invested per unit of production and income declines ensuing greater leisure.  The upshot is resulting cognitive surplus, the capability of human beings to pursue their passion in constructing new outlines of knowledge and information during leisure time. It further opens up wide-ranging possibilities of creative pursuits generating greater accretion of wisdom and scholarship setting in a process of increasing returns.

Information sharing

Farmers often orally document their practices and share with their peers. If analog economy constraints limit sharing to neighborhood groups, digital economy assists such sharing on large scale. Knowledge thus created is based on field experience factoring the local soil and weather conditions.  Not only other farmers gain from shared insights, agricultural and scientific experts might use this new information in adding to the accumulated research. The same holds good for numerous entrepreneurial units functioning across the hinterland. As web transforms from English dominated to vernacular and text based to voice based, the rapidity of diffusion will raise manifold.

Entrepreneurship

Digital India potentially integrates producers, consumers and markets. It presents a prospect to discover new markets, new consumers, new vendors etc. Prospective women entrepreneurs observing from experiences of their experienced urban counterparts might be incentivized to plunge themselves. Going beyond, sharing of information across web and ease of barrier in business across web is likely to go a long way in mainstreaming women and subaltern entrepreneurship.  Development of digital system with government support adds to incentives. Underprivileged entrepreneurs might get exposure to lending apparatus like peer to peer (P2P) lending and crowd-funding thus access to diverse resources for funds.

Information asymmetry

Absence of equal access to information impedes price discovery.  Imperfect information and constraints in information processing creates difficulties for both producers and consumers in comparing prices across markets. Digital India can play significant function in being the infrastructural backbone for tools aiding dissemination of information. This makes possible elimination of the ‘middle-men’ industry that emerged to intermediate between producers and consumers and among producers to resolve information asymmetry.

E-Commerce

It is a misconception that people in the semi-urban, rural and the hinterland are starved of consumerist products and lap even sunset technologies. Facts suggest their desires match their urban counterparts and aspiring for similar consumption behavior. Brick and mortar retailing outside metropolitan zones are inhibited both in depth and breadth of assortment. E-commerce bridges this gap. Given the attractiveness of Cash on Delivery (CoD), evidence points out to plentiful purchases from the semi-urban areas. Digital India will offer added momentum to the industry. While it enables firms to leverage external economies, it enables households to enhance consumption while decreasing shopping time.  Besides, hinterland B2B and C2C economies might be positive externalities.  Mobile economy will further underpin the above.

Bridging social and academic gap

Going forward, capacity and access differentials might shrink with passage of time. Rather than a barrier, it might be a step forward connecting the hinterland to the mainstream. It is not unusual to find that frivolous wishes trump the more productive use of technology. The early adapters either in Western world or in India did not jump to productive uses on day one. Self exploration and discovery led the users and producers alike towards the productive dimensions of the internet ecology. If at all, internet arose as generative decentralized network open to amateur tinkering and contributions.

In addition, as urbanization played an important role in tumbling caste tensions and inequities, percolation of digital domain can go long way in reducing barriers across castes, communities, geographies etc.

Rural areas as centres for cost arbitrage

India’s ascendance as nucleus of IT industry was a product of cost arbitrage. If in the early stages, Bangalore or Hyderabad etc happened to be the hubs, the diffusion of the net and lower costs might witness a shift of these industries towards tier two cities. As technology disintermediation creates environment for absence of scale, it might be an opportunity for the smaller entrepreneurs in rural hinterland to position themselves as vendors or even producers of software and software enabled services.

Reemergence of rural/folk cultures

Rich oral folk culture, though abundant faces threat from forces of ‘modernity’. Digital economy is about niches and indisputably be a focal point for sustaining and preserving the rural/folk/local cultures.  Local communities as stakeholders in cultural conservation might not only ensure a fresh lease of life, but an opening to thrive and score in niches across the country and overseas. Migrants often remain attached to their roots and thus prime movers behind cultural preservation.

This also can enable reconstructing histories of these locales. In fact some rural areas are mapped quite heavily across Google maps etc. This can be attributed to the digitally advanced from vicinity using cognitive surplus to link up to their erstwhile roots.

Concluding Remarks

There is categorical need to address power problems and other related infrastructural issues. The problems arising of design incompatibility is best redressed through non government interventions.  A major flaw has been top down approach without permitting the stakeholders to design and execute as and when the need arises. Implied is follow the ‘procrastination principle’- resolve the problems as and when they arise. As the mobile economy takes deeper root, access and ownership barriers are expected to diminish.

User behavior not in consonance with intended objectives need not deter policy makers or participants. It indicates the presence of healthy spirit of curiosity and enthusiasm for self learning and discovery. In fact the first wave of optical fiber broad bandwidth to facilitate large scale e-commerce transactions led to dotcom burst. Out of its ashes emerged India as destination for IT Enabled services.

Albeit concerns, there is palatable aspiration among the vast have-nots to leverage the internet economy on identical terms like current digital-haves. If inadvertent spillovers portent an altogether new ecosystem which we may never have comprehended, this will be due to these aspiring masses. Digital India is for these masses and if it manages to fulfill these aspirations, it will be a revolution and greatest accomplishment.

Prashant Kulkarni teaches economics, a digital economy and globalization at a leading B-School. His area of interest lies in dissecting resource contestations and human behavior at the intersections of digitization, urbanization and globalization.
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