Category Archives: cloud

China will invest US$14.6 bil to develop digital economy

chinaChina will invest 100 billion yuan (about US$14.6 billion) for developing the digital economy in the next five years, according an agreement signed at the International Conference on the Digital Economy and the Digital Silk Road.

The investments will go to projects on big data, internet of things (IoT), cloud computing, smart cities and the digital Silk Road, according to an agreement signed by China Development Bank and the National Development and Reform Commission.

The development of the digital economy has been listed as an important task for building modern economic set up in China and to achieve high quality development.

China has achieved much progress in this area over the past few years, by way of rolling out a raft of measures, which included a national big data strategy.

A report released by Cyberspace Administration of China said the country’s digital economy grew to 27.2 trillion yuan last year, up 20.3% year-on-year, and accounted for 32.9% of  its Gross Domestic Product (GDP).

The two-day International Conference on the Digital Economy and the Digital Silk Road, held in Hangzhou, a scenic city in east China’s Zhejiang Province, opened  on Tuesday.

source: ww.theedgemarkets.com

Overcoming digital divide – analysis (India)

India FlagIndia’s policies towards digital regulation are inadequate. Future policy-making must be based on economic considerations and evidence, not on myopic political considerations

In 2014, the Narendra Modi-led Government came to power with an objective of ‘minimum Government, maximum governance, aimed at showcasing the country as an investment-friendly destination. Thereafter, on various occasions, the Government announced measures to boost private sector investment in the country. To its credit, several high-level policy decisions, like the Goods and Services Tax (GST) and Insolvency and Bankruptcy Code were enacted to improve the business and investment environment. However, the major test for the Modi-led Government is yet to come.

India is on the cusp of laying the foundation stone for the next digital revolution (Industry 4.0). Industry 4.0, synonymous with the digital economy, is expected to contribute one trillion dollar to national output by 2022-23. Given the undeniable potential of the digital economy to contribute outsize growth, it is incumbent on the Government to adopt a delicate, evidence-based approach to put in place an appropriate regulatory architecture that ensures the country reaps full dividends from Industry 4.0.

However, emergent policy recommendations in the past few weeks indicate that the Government is handling the nascent digital economy with a 20th century mindset. These include recommendations of the Committee of Experts, led by Justice (retd) BN Srikrishna, the draft e-commerce ‘policy’ and the draft report of the Working Group on Cloud Computing — the latter two, as reported by the media, amply illustrate the perils of a dated mindset.

For starters, the decision-making process of all the three have remained opaque and had negligible representation from private organisation, let alone investors. Therefore, the final outcome of these groups has been skewed towards one direction, while ignoring the consideration of other stakeholders, in particular investors. For instance, despite highlighting the economic cost and concomitant adverse impact on the start-up ecosystem associated with data localisation in a white paper, the final recommendation of the BN Srikrishna committee endorses the same. Similar provisions for localisation have found their way in Cloud computing recommendations as well as the draft e-commerce policy. It is important to note that storage of data in India would not mean access to that data by local entities. Additionally, such measures can exacerbate cyber-security risks by compelling enterprises to invest in increasing data storage capacity, while apportioning fewer resources to ensure adequate security controls.

Furthermore, voices for protectionism, which are reminiscent of the discourse during the 1991 reforms, are getting louder. Particularly with respect to the draft e-commerce policy, a document, which besides guiding India’s position at the international trade fora, is aimed at promoting the domestic e-commerce ecosystem. This policy will implicate all aspects of the digital economy, and have a key role to play in India’s preparation for the emergent digital revolution.

However, protectionist voices have argued that the Government should formulate different rules for foreign and domestic companies, citing that availability of abundant capital with foreign companies could kill domestic entrepreneurship.

India has come a long way from considering investments as a bail out to solve external payment crises, to recognising that investments bring with them growth and employment, and consequently make a significant contribution to the economy at large. Constant liberalisation of the foreign investment regime in the country is an example of this approach.

Nonetheless, while dealing with digital economy, a constant international best practice which is cited by protectionist voices is that of China. The question to ask is: Can India afford to adopt the Chinese approach? Currently, India’s share in global value chains (GVC) is estimated to be less than two per cent, while China’s share is in double digits. Importantly, China’s peculiar political and economic outlook makes its policies inimitable. For instance, most Chinese players in the digital economy have been supported by state-led investments.

Unlike China, India neither has the economic footprint to deter other countries from taking restrictive reciprocal measures, nor are our entrepreneurs and businesses supported by public sector finance. On the contrary, foreign capital has played a vital role in providing India’s home-grown digital companies like, Ola and Paytm, a global stage. Introducing onerous regulatory conditions and uncertainty could impact the trust of the investors in India as a promising and stable digital market, consequently damaging the image of the country as an investment-friendly destination.

Therefore, it is important that future policy-making is based on economic considerations and on evidence rather than myopic political considerations. Additionally, the need of the hour is to take a nuanced approach with respect to policies which are expected to impact India’s economic aspirations in the coming decade. Given that the 2019 Lok Sabha election are around the corner, the Modi Government will be under pressure to succumb to various protectionist demands. It should take care to avoid such pitfalls if it is to reap economic dividends in its second-term in power which it projects to win.

source: www.dailypioneer.com

Digital economy plays key role in high-quality growth (China)

chinaChina’s manufacturing industry is aiming to transform itself from “Quantity” to “Quality”. The key strategy is to develop a digital economy, said Li Yizhong, the former minister from China’s Ministry of Industry and Information Technology on Sunday.

Speaking at the 2018 World Forum on Scientific and Technological Innovation in Beijing,Li said “A digital economy means a deep integration of Information technology (IT) and the manufacturing industry.”

“It is the trend of a global economy as well as a national strategy for a high-quality growth in manufacturing and internet development,’ he added.

Then, how to develop a digital economy?

Li noted that cutting-edge technologies like big data, internet, cloud computing, and Artificial Intelligence (AI) need to be closely integrated with the manufacturing industry to develop new products and business models.

There are three areas where China’s digital economy has developed the most in recent years, Li summarized, firstly, the IT industry has seen a fast growth and contributed 8 percent to the overall GDP growth last year.

Secondly, enterprises have played bigger roles in developing a digital economy. They have realized the significance of the integration between manufacturing and IT. For instance, Alibaba has rolled out an industrial system that integrated the internet and its companies. The IT industry includes telecom manufacturing, communication services, software and the internet industries.

Thirdly, the benchmarks in digitalization have been improved. For example, indoor broadband penetration has reached 86.7 percent while mobile broadband penetration has risen to 86.3 percent, and the internet surfing fee has been reduced by 46.2 percent, which has exceeded the goals set for 2020.

The number of robots used by every 10,000 workers on average has been increased from 23 in 2013 to 50 as of now, which is close to the world’s averages. The patents held by every 10,000 citizens on average have doubled since 2013. Moreover, enterprises hold over 60 percent of the overall patents.

He also pointed out the challenges faced by digital economy developments.

Core technologies are still controlled by other nations. The Chinese economic structure is still at the low-end. There are significant gaps between China and other developed countries in chips, integrated circuits, software, and data processing techniques. Ninety-five percent of high-end chips are from overseas. Therefore, technological innovations are vital for developing a digital economy.

Most enterprises lack awareness when it comes to digital transformation. They need technical assistance and support. Their understandings of how technologies could enhance productivity require further education. Meanwhile, tech companies lack the knowledge of the industrial demands.

Li suggested strengthening the communication and education for digital transformation among enterprises and leading industrial enterprises by collaborating with internet giants to develop new applications.

On the one hand, interdisciplinary talents who have both knowledgeable of technologies like big data and have the industrial expertise are extremely scarce. On the other hand, loads of traditional workers have been laid off. In France, 3 million jobs will disappear because of digitalization. While in the Guiyang hi-tech industrial development area, 42,000 jobs were created by the digital economy and related industries, Li said.

source: http://en.xfafinance.com

Competition challenges in the digital economy

Competition21-750x400Slow productivity growth and rising income inequality have shaped the world economy in a time of rapid technological change. A variety of explanations have emerged to help us understand these related trends, but one overarching theme is the decline in competition.

The combination of increasingly concentrated markets, rising market power of large firms, and slowing business dynamism suggest that competition among firms is weakening. The concern is that the rise of dominant firms will hinder the diffusion of technology and exacerbate income inequality.

Adding to these concerns are two key features of the digital economy—the potential for scale with digital platforms and the growing importance of intangible capital—that, by their very nature, lend themselves to bigger and more dominant firms.

These characteristics of the digital economy present challenges on how we think about and implement competition policy. Policies aimed at ensuring a level playing field and fostering a dynamic and inclusive economy will therefore need to adjust to better reflect a growing reality.

POTENTIAL FOR SCALE WITH DIGITAL PLATFORMS

First, market concentration is especially high in markets with large returns to scale and network effects. Going digital can come with high capital expenditures, like setting up data centers and other digital infrastructure. But it also comes with the ability to reproduce digital offerings instantly and at low or zero marginal cost, implying large returns to scale and lower prices for consumers. When network effects are involved, the potential returns to scale are even greater.

The argument for bigger firms in these markets is that consumers are the biggest winners. Free digital services and a plethora of user data used to customize and cross-sell products help raise consumer welfare and offer greater choice. (In some cases, firms controlling “big data” can extract more consumer surplus through sophisticated algorithmic pricing and customization of offerings.)

Small businesses and entrepreneurs also benefit, the argument goes. Digital giants like Amazon, Google, and Microsoft, among others, reduce startup costs for small firms by offering cloud services and open-source software, make it easier to reach distant markets through their platforms, and offer venture funding and financing.

Due in part to the potential to scale up quickly, the threat of disruption is higher in the digital economy than in the past. Many argue that this threat strengthens competition among big firms as well as smaller firms who can unseat the giants (see herehere, and here).

However, it is not so clear that these arguments for bigger firms always hold. Less than one percent of startups end up as $1 billion companies and are often acquired or imitated by the giants along the way. In addition, industry lines are increasingly blurred as big firms leverage their user’s data to offer a broader range of goods and services, providing more valuable data on spending habits, and, ultimately, reinforcing the competitive advantage of big firms across industries.

A challenge for policymakers and regulators comes when assessing who indeed the biggest beneficiaries are. Diane Coyle of the University of Manchester points out that although the network effects of digital platforms produce real economic welfare gains, it is unclear how big those gains are or who captures them. Advertisers also place great value on free services and, as Luigi Zingales and Guy Rolnik of the University of Chicago notes, users do pay for these services in the form of very valuable information.

More economic tools are needed to quantify consumer benefits in such markets where traditional pricing does not provide the same kind of signals on market power as in other industries. Such assessments would better help policymakers and regulators ensure a level playing field and better distinguish between competitive and anti-competitive behaviors.

GROWING IMPORTANCE OF INTANGIBLE CAPITAL

A second feature of the digital economy that advantages larger firms is the growing importance of intangible capital.

Unlike tangible capital like buildings and equipment, intangible capital is not physical. It consists of ideas, branding, business processes, software, supplier relationships, licensing agreements, and other immaterial assets that generate value for a firm.

As digitization changes business models, firms are placing greater emphasis on intangibles. In the U.S., U.K., and some European economies, intangible investment already exceeds investment in tangibles.

As Jonathan Haskel and Stian Westlake describe in their book Capitalism Without Capital, there are four key economic properties of intangible assets that differentiate them from tangibles. Those properties are “scalability” (multiple people can use them simultaneously), “sunkenness” (the cost of producing them is mostly sunk), “spillovers” (easy for others to appropriate), and “synergies” (can be combined effectively).

With these properties, firms can achieve much larger scale, go to great lengths to prevent spillovers to competitors who can appropriate their sunk investments, and acquire other firms with intangible assets that offer synergies (like human capital or branding). Haskel and Westlake argue that these properties help explain the rise of superstar firms, more mergers and acquisitions, and higher market concentration in industries with a larger share of intangible investment.

In industries with greater intangible investment, small firms may have a harder time finding financing to invest and boost productivity. Small firms typically rely on bank lending that often require collateral from borrowers. But intangibles cannot offer physical collateral, are hard to measure, and, in the case of investments in knowledge and research and development, can easily be appropriated by others. These characteristics of intangibles make private equity financing more attractive for intangible-heavy firms, not only to undertake investments in assets where the cost is mostly sunk, but also to have an easier time protecting intellectual property when privately held.

In addition, private equity financing and venture capital for small firms can be difficult to scale up. These difficulties are partly due to the importance of social relationships and the large role of public subsidies in supporting a vibrant venture capital industry, which takes a long time to develop.

Large firms, on the other hand, can use their economies of scale (and buying power to acquire firms) to capture spillovers and exploit synergies. They also more easily attract capital.

LOOKING AHEAD

Are we headed into an economy dominated by big firms? Even techno-optimists, who believe that it is only a matter of time before the potential for today’s technological advances drive faster growth, are pessimistic on the implications for distribution. Concentrated markets may become the new normal. Policies would need to adjust to ensure level playing fields. In addition, better intellectual property protections, broad and inclusive financing ecosystems, new measurement standards, and greater investment in skills are examples of policies better suited for an intangible economy that is dynamic and inclusive. The possibilities are limitless, but the promise won’t realize itself.

source: www.brookings.edu

Qatar launches digital economy programme

downloadThe Minister of Transport and Communications Jassim bin Saif al-Sulaiti launched yesterday the ‘digital transformation for SMEs programme’ that is aimed at empowering enterprises to adopt technology seamlessly.

The initiative is designed to ensure the success of small- and medium-sized enterprises (SMEs) by increasing their productivity and innovation.
At a press conference, the minister said 5,000 companies are expected to benefit through the scheme by the end of 2019, stressing that the ministry is committed to keep pace with with the digital age. He said the government of Qatar has clear plans for digital transformation and the enhanced role of technology in different sectors, in order to realise the Qatar National Vision goal of building a knowledge-based society.
Al-Sulaiti noted that Qatar now has some of the world’s most developed IT and communications infrastructure, including fiber-optic network, data centers and cloud-based computing services.
He said there are now 2,400 e-government services, with more than 1,000 of them on the internet and more than 600 of them on mobile, stressing that he is confident the government will provide all its services electronically by 2020.
The minister stressed that it is the citizens who will lead the digital transformation initiative, noting that Qatar is first worldwide in the use of internet. “The use of smartphones is at 147% and social media 99%. The ministry will also implement the smart Qatar programme “Tasmu” to use smart solutions in five economic sectors in a bid to speed up the implementation of Qatar National Vision 2030.”
Al-Sulaiti called upon the owners of small- and medium-sized enterprises to participate and benefit from the programme, which is designed to support them to be at the forefront of ICT development.
He also called on them to establish companies capable of playing a role in the development of digital economy and to take advantage of this golden era in the history of Qatar to build companies capable of contributing to the diversification of sources of income.

The Digital transformation of SMEs Program focuses on three specific areas: web presence, e-commerce, cloud services.afadfa

The ministry’s “Digital Transformation for SMEs programme” is set to provide strategic partnership with the Ministry of Economy and Commerce, Qatar Development Bank, Qatar Chamber, The Communications Regulatory Authority, Qatar National Bank, Ooredoo and Microsoft, for a range of digital and consulting services in the fields of e-commerce.
The programme will improve the business model through digital solutions, to offer the best services to meet the demands of customers, and to enable electronic partnerships with technology companies, financiers and government agencies to enhance the digital economy in the country, and to increase investment and raise gross domestic product.
The minister also toured an exhibition being held on the sidelines and met with officials of a number of small- and medium-sized companies working in the field of digital services.
After the tour, he said the firms participating in the accompanying exhibition represent companies that were able to provide services through the adoption of the programme of digital transformation, which has contributed to the expansion of their services. Besides, it enabled the customers of those companies to deal smoothly with them via smart phones .
Two discussions held on the occasion focused on the role of digital transformation in driving innovation in business and promoting economic growth and the power of web technologies, e-commerce and cloud services in the growth of small- and medium-sized enterprises.

What’s in it for SMEs?

1111

more: https://godigital.motc.gov.qa/index.php/en/

source: http://www.gulf-times.com/story/587385/MoTC-launches-digital-plan-to-empower-SMEs