From UPSC perspective, the following things are important :
Prelims level : ASEAN
Mains level : Paper 3- Adoption of digital transformation
COVID-19 has forced South Asia to take a quantum leap in digitalisation, which will help shape its future prosperity.
Spike in digitisation due to Covid
- 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.
- Pandemic accelerated South Asia’s embrace of e-commerce, boosted by digital payment systems.
- Bangladesh alone witnessed an increase of 70-80% in online sales in 2020, generating $708.46 million in revenues.
- Even smaller nations such as Nepal recording almost an 11% increase in broadband Internet users.
The dangers of a digital divide
- A wide digital divide persists in access and affordability, between and within the countries of South Asia.
- Despite having the world’s second-largest online market, 50% of India’s population are without Internet with 59% for Bangladesh and 65% for Pakistan.
- This divide could permanently put children out of school, place girls at risk of early marriage, and push poor children into child labour costing economies billions of dollars in future earnings.
- Businesses too have paid a heavy price for the gap in digital solutions, whereby many South Asian firms failing to embrace e-commerce or other cloud-based technologies to survive the financial chaos of the novel coronavirus pandemic.
- Digital transformation is a global imperative with the adoption of advanced technologies.
- At the forefront of Asian digitalisation are countries such as Singapore, Japan, and South Korea recognised as global technological hubs.
- The digital boom in the Association of Southeast Asian Nations (ASEAN) economies is pushing a “common market” initiative, fostering regional economic integration and enhancing global competitiveness.
- South Asia has also made significant strides in the adoption of digital technologies such as the Digital Bangladesh Vision 2021.
How digitalisation can help South Asia?
- The region still has a long way to go.
- Jobs in e-commerce: E-commerce could drive the post-pandemic growth in South Asia, providing new business opportunities and access to larger markets.
- In India, e-commerce could create a million jobs by 2030 and be worth $200 billion by 2026.
- Growth driven by Fintech: Fintech could drive significant growth and reduce poverty by building financial inclusion.
- Increase in productivity: A timely, inclusive, and sustainable digital transformation can not only bolster productivity and growth but also serve as a panacea for some of the region’s socio-economic divides.
Steps need to be taken
- To reap the dividends of digital transformation, South Asia needs to address legal, regulatory and policy gaps as well as boost digital skills.
- Digital infrastructure: A robust digital infrastructure is a sine qua non and there exists a huge financing gap.
- India alone needs an annual investment of $35 billion to be in the top five global digital economy.
- Private-public partnership: Public-private partnership needs to be leveraged for the region’s digital infrastructure financing.
- Regulatory roadblocks need to be addressed as e-commerce regulations are weak in South Asia.
- Digital literacy: There would be no digital revolution without universal digital literacy.
- Governments and businesses need to come together to revamp the education system to meet the demand for digital skills and online platforms.
- Cybersecurity measures: The crossflow of data and personal information calls for stringent cybersecurity measures as many have experienced painful lessons in data privacy during the pandemic.
- Digital Single Market Proposal: By addressing issues such as regulatory barriers on currency flows inhibiting online payment to transport-related constraints for cross-border e-commerce activities, South Asia can emulate the European Union’s Digital Single Market Proposal.
- Collaboration: Concerted collaboration at all levels is needed to push South Asia out of stagnancy and towards a digital future of shared prosperity.
- Partnership for digital revolution: During the pandemic, South Asian nations joined hands to collectively battle the crises by contributing towards a COVID-19 emergency fund, exchanging data and information on health surveillance, sharing research findings, and developing an online learning platform for health workers.
- If the eight nations (Afghanistan, Bangladesh, Bhutan, India, Nepal, Maldives, Pakistan and Sri Lanka) can start walking the talk, partnership for a successful digital revolution is plausible.
A shared “digital vision” could place the region on the right track towards the Fourth Industrial Revolution.