Regulatory policy

An exceptional departure; 7 policy support initiatives to catalyze the New India techade

In a few months, India will succeed Indonesia as the chair of the Group of 20 (G20). Amid the global turmoil, India will have to shoulder the responsibility of leading the platform for global economic dialogue to benefit the region as well as the nation itself. India’s growing importance and wealth are already recognized by most countries, and this will be the perfect opportunity for India to finally lead by example. What makes this even more interesting is that this opportunity comes at a time when the government is trying to make India a US$1 trillion digital economy through its 1000 day plan.

As India works towards building and realizing Vision 2047, the world will look to India to lead the platform through one of its most divisive and challenging phases, due ongoing crises between Russia and Ukraine. If India is to transform into a global economic superpower and knowledge economy, now is the time to rise up and lead. The digital India that we have been building so carefully for nearly a decade will finally be able to spread the model of inclusive development to the world. At the national level, we will also have to intensify our efforts to achieve all the goals and realize the vision of a digital society.

In 2014, when Narendra Modi took office as Prime Minister of India on the promise of rapid development and inclusive economic growth, few could have imagined the kind of transformative changes the country would experience in the years to come. Eight years later, the Prime Minister recently launched Digital India Week 2022 in Gujarat, launching new digital initiatives and celebrating the success of initiatives launched earlier. The prime minister had also previously spoken of a smartphone in every Indian’s hand and a drone on every pitch. In 2014, it was unfathomable. To put things into perspective, 4G had just hit the market in India and smartphones were only owned by people with good purchasing power. Average data rates were INR 33 per GB of data. With that in mind, we’ve certainly come a long way, but are we any closer to where we set out?

The Prime Minister’s 8-year development program has ridden the wave of digital transformation. He has repeatedly reaffirmed that India will grow through low-cost, inclusive, made-in-India and innovative digital technology. This is the last attribute that has been emphasized the most: growth driven by innovation, innovation first and innovation by young people. Although the government has spent heavily on infrastructure, the focus has always been on continuous innovation that can place India on the global technology map. With this idea, the celebration themed “Catalysing the Techade of New India” aimed to transform the nation into a digital society and a knowledge economy.

The unwavering focus on transforming India digitally has indeed made India more desirable for investors and more fertile for the creation of new startups. India now has over 100 unicorns and ranks India third among countries with most startups valued at $1 billion or more. With supportive policies and a focus on more investment, we should be able to overtake China and the US; the latter has more than 8 times the number of unicorns. India is certainly catching up, but there is still a long way to go to close the gap between India and the top 2. As the Digital India program completes its 7 years, here are 7 things that will propel the Digital India program in hyperdrive and transform India into an economic superpower in the next 7 years.

First, new regulatory models that work for new digital-only or digital-only businesses. As all businesses seek to go online with the aim of providing remote services to people in different locations, we need regulation that works for these businesses. This would include information campaigns and education of all stakeholders involved, major capacity building of regulators with a good understanding of digital businesses, and instilling a scientific temperament throughout the regulatory ecosystem. Online businesses simply cannot be measured by the same yardstick as brick-and-mortar businesses.

Second, sustainable policy ecosystems to generate more investment are an absolute necessity for a number of reasons. Stability is important for investor and founder confidence. If a founder or investor doesn’t feel comfortable putting their time, effort, and money into something, they probably won’t. We’ve seen it with the gambling industry where investment dried up after blanket bans in some states. It also leads companies to move overseas in search of more stable political ecosystems. This migration must stop and the outflow of capital and talent must be maintained. We are fast approaching a time when we will have to choose between strict regulation and limitless innovation.

Third, reducing barriers to entry for new businesses and entrepreneurs is also essential. This is related to the first recommendation, but should be treated as a separate issue. As we know, competition is an absolute necessity for innovation, and we need as many people as possible to frequently come up with new business models, new products and new ideas to stay ahead. . However, regulatory and licensing regimes can make it an absolute nightmare for young engineers and entrepreneurs trying to launch their products or start their business. From the further simplification of business registration to the relaxation of various requirements to bring a product or service to market, unless we support our young minds, it is very difficult for them to innovate.

Fourth, we desperately need new models of wealth generation and employment to combat youth disillusionment. Government and private sector jobs are simply not enough to meet the needs of a growing population. We will need to support and promote businesses that can empower people, for example, content creation, streaming and gaming. The latter can be very lucrative for experienced professional players through national and international tournaments.

Fifth, we will need to find new ways to qualify, retrain and upskill the existing workforce to prepare it to work with the technologies of the future. As manual jobs are replaced by automation, we will need these workers to be skilled to handle more complex roles and responsibilities. According to a WEF estimate, nearly half of the global workforce will need to be skilled by 2025. And that should be of concern to us as a nation, because investing in skills will add US$8.3 trillion to the global economy by 2030. We simply cannot miss this opportunity.

Sixth, more emphasis must be placed on the physical and mental well-being of our people. The Union Government’s ‘Digital Yoga’ initiative is a step in the right direction, but more needs to be done, especially for mental health, which is still neglected at the policy level. A Lancet study showed that poor mental health costs the global economy US$2.5 trillion per year and the cost is expected to double by 2030. If the business phrase “money saved as money won” has any value, it becomes imperative to work actively to improve the mental health of our people.

Seventh, we need renewed respect for research and development at the national level. Researchers are among the lowest paid employees in India, while in countries with the best research results, they are among the highest paid. The correlation is not fortuitous: exceptional talent needs exceptional compensation. Companies must be encouraged to invest more in research and development. This can be done through tax incentives, for example, any part of the income reinvested in R&D could be exempt from tax and directly linked to the results of the research. This would be one of the most progressive measures governments can take to promote innovation.

The Digital India program is probably the most progressive, reforming and transformative initiative since the globalization of the Indian economy. But unlike opening the economy, digitally transforming the nation can take years, even decades; bridging the digital divide, improving access and adoption, and ensuring privacy and security while doing so, will require a colossal effort from all stakeholders. While the push for transformation has driven many technological advancements over the past 7 years, further advancements over the next seven years will depend entirely on political support and collaborations. As we complete our 1000 day journey towards a US$1 trillion economy or start with new digital initiatives such as Digital India Bhashini and Digital India Genesis which were announced during Digital India Week 2022, all eyes will be on the political framework to support these and many other initiatives that will serve the country so well.



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Disclaimer

The opinions expressed above are those of the author.



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