Tag Archives: China

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

New Vision for A Global Digital Economy Emerges At Smart China Expo (event)

smart china expoIndustry leaders attending the first Smart China Expo (SCE 2018) in China’s western city of Chongqing have articulated a new vision for how the world’s digital economy will evolve at the event’s Global Digital Economy Summit, a forum that brought together 650 participants under the theme “New Digital Economy, New Growth Engine.” Speakers projected a future in which Big Data reshapes the way businesses and governments operate, cooperate, and compete.

New forces being unleashed by current innovations threaten to disrupt the existing economic growth models of many industries, as digital information will rise to the same status as land and capital as a key element of productivity. Meanwhile, governments around the world are building “smart infrastructure” as they seek to use technology to upgrade power grids, railways, ports and toll roads, and seek to integrate everything. Big Data technology also helps build “smart cities,” boost consumption, and improve social welfare programs ranging from education to philanthropy to healthcare.

“Artificial Intelligence (AI) could be a big contributor to healthcare,” said Piero Scaruffi, a cognitive scientist, AI expert and writer of A History of Silicon Valley. Piero, believes that technology will make a better society and that AI will slash the cost of healthcare. “When we talk about machines saving lives, that’s real progress,” he said.

Kate Garman, smart city policy adviser to the Mayor of Seattle, shared insights into smart city management at SCE 2018. “Smart cities have challenged cities to be innovative. It has been the inspiration for cities to jump forward using technology,” she said.

Despite huge progress, China still faces many hurdles in developing a digital economy, said Li Yizhong, former head of China’s Ministry of Industry and Information Technology (MIIT). “Chinese manufacturers lag in the application of smart manufacturing, and businesses need to accelerate their digitalization process.” Li pointed out that “issues like how to balance improving efficiency and protecting jobs, and how to protect commercial secretes in the age of Internet also remain challenging.”

Alibaba Vice President Liu Song predicted that over the next 10 years, AI and the Internet of Thongs (IoT) will replace mobile technologies as the world’s defining digital technologies, which is why Alibaba is heavily investing in three areas: Big Data, network synergy and smart data. Liu’s view was echoed by Cai Yongzhong, Chairman of Deloitte China, who urged traditional businesses to actively embrace innovation in the face of the upcoming digital revolution.

For more information, please visit http://www.ichongqing.info/smart-china-expo/.

About Smart China Expo (SCE)

Held Chongqing, the Smart China Expo (SCE) is a world-class, national-level Expo that supports the development of Big Data and smart technologies in Western China. High-profiled guests joined the event including 4 political heavyweights, 22 national government officials that above ministerial-level, 58 persons who are in charge of institutions under national departments, and 407 senior representatives from top tier global brands such as Siemens, IBM, Microsoft, Qualcomm, Baidu, Alibaba, Tencent, Huawei and more.

source: www.multivu.com

Creative economy has new impetus in digital world

Fast-paced changes in the digital economy are shaking up the creative industries and producing new opportunities to advance development and diversity.

The intersection of the creative and digital economies – and the emerging opportunities at this nexus – was an important discussion point at a recent services trade fair in Beijing, China, with UNCTAD and the others focusing on how the digital world is shaping new economic and trade models.

The 2018 Beijing International Forum on Creative Economy and Summit on Augmented Reality Industry Development took place as part of the China Trade in Services Fair in Beijing from May 28 to June 1.

“Services are a powerful economic driver,” UNCTAD Deputy Secretary-General Isabelle Durant said during a keynote speech to open the fair “They made up 56% of developing countries’ total GDP in 2016, and 54% of their total employment in 2017.”

UNCTAD Creative Economy Programme Chief Marisa Henderson was also a keynote speaker at the creative economy forum. She was joined by UNCTAD’s Creative Economy Programme team which participated in several side meetings and events to highlight the growing role of the creative economy for economic development.

New engine

The forum was held on 29 May and was jointly hosted by the World Tradepoint Federation and the Beijing Municipal Commission of Commerce with the participation of UNCTAD.

It tackled the theme of how technological innovation promotes the development of creative economy. Participants looked at how augmented reality, technology and the creative industries are combining to form a new engine for economic growth.

Ms. Henderson spoke about the creative economy in the digital era.

“In terms of development, digital creation, distribution and participation have revolutionized the creative and many other industries and are driving new economic and trade models forward,” she said.

“Creative workers and creative content are already integral to bringing the digital world to life – and it is critical that we understand both this contribution and how it promotes socio-economic development.”

Ms. Henderson’s keynote was supported by a presentation by team member, Carolina Quintana, on the trends in international trade in creative industries, led by dynamic markets in East Asia. It focused on the region’s increasing digital content market share in services sectors related to architecture, audio-visuals and personal, cultural and recreational services.

More than 200 people attended the forum, including experts and officials of international organizations, the Chinese public sector, chambers of commerce and enterprises.

Ms. Quintana was also invited to speak at the Beijing Forum on International Industry Development.

At this event she discussed the important integration of the “exhibition industry” in the creative industry ecosystem.

“Exhibitions are an important way to showcase destination and goods and services offerings – especially creative goods and services. They contribute to creative enterprise, trade, export development and tourism, as well as knowledge bases and community cohesion.”

Creative China rising

The fair took place just over six months after the 19th National Congress of the Communist Party of China (CPC), where the cultural and creative industries were highlighted as one of the main pillars of the national economy.

In his address at the CPC, President Xi Jinping’s issued a call to boost the vitality of the domestic cultural and creative sector by upgrading its industrial structure, fostering major brands and boosting consumption.

China has consistently moved toward a more creative, consumer-driven economy. The value added from China’s culture-related sectors clocking $463.9 billion in 2016 a 13% rise from the previous year, according to data from the National Bureau of Statistics and reported by China Daily.

This value added accounted for 4.14% of China’s gross domestic product (GDP), up 0.17 percentage point from the share in 2015.

“Chinese and more broadly Asian growth represents great opportunities for other developing countries which wish to strengthen cultural exchanges and creative industries cooperation with these fast-growing economies,” Ms. Henderson said.

UNCTAD also took part in meetings with the Beijing Municipal Government to jointly organize a Creative Economy Forum in 2019 and participate in Exhibition Industry International Trade Forum, part of the renowned annual China International Import Fair in Shanghai, due to take place on 6–7 November.

source: http://unctad.org

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