Tag Archives: GDP

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

GSMA: Free Flow of Data across Borders Essential for Asia’s Digital Economies

GSMAGovernments in Asia can expand the region’s digital economy and unlock further socio-economic benefits for their citizens by removing unnecessary restrictions on the movement of data internationally, according to a new report released by the GSMA today at the Mobile 360 – Digital Societies conference in Bangkok. The study, ‘Regional Privacy Frameworks and Cross-Border Data Flows’, reveals that striking the right balance in the region’s data privacy regulations could significantly enhance economic activity and future innovation in 5G, the Internet of Things (IoT) and artificial intelligence (AI).

Over the past decade, international data flows have increased global GDP by 10.1 per cent, and their annual contribution to global GDP has already surpassed US $2.8 trillion1 – a larger share than the global trade in goods. The ability to transfer, store and process data enables commerce, spurs innovation, and drives the development of new technologies, platforms, services and infrastructure.

Although the Asia Pacific region has made good progress in the development of data privacy frameworks that protect consumers while also allowing data to flow across borders, the report highlights that variances in data privacy laws across countries is holding back trade and innovation. The report also calls for better links at a regional level between Asia’s two main privacy frameworks – the ASEAN Framework on Personal Data Protection and the APEC Privacy Framework – to enable cross-border data flows.

“The immense economic opportunities arising from the digital economy and data flows are indisputable,” said Boris Wojtan, Director of Privacy, GSMA. “Working towards a pan-Asian approach to data privacy is critical to protecting the rights of individuals and unlocking this economic potential, not only in Asia, but around the world. Regulating people’s personal information by a patchwork of geographically bound privacy laws will only restrict how Asian companies can innovate and bring better products and services to consumers in the future. Now is an important time for all countries to take actions to bridge the differences in their privacy regulation and achieve greater alignment.”

The study evaluated various regional data privacy frameworks and their key principles, while diving down into individual countries to identify national approaches to privacy regulation. It highlights specific steps that all countries, including less developed states, can take to support greater alignment across Asia. Some of the key recommendations included in the report are:

  • APEC and ASEAN governments should consider the options outlined in the study to bridge the differences between their respective privacy frameworks and seek interoperability with other regional frameworks;
  • Countries should advance the alignment of national-level privacy regimes by conducting a landscape analysis to see where they stand in terms of data privacy and reviewing the experience of other governments in the region to understand common paths forward;
  • Policymakers in government and privacy enforcement authorities should support deeper collaboration and cross-learning across the region; and
  • Governments should also draw on non-government privacy experts in the private sector and academia to inform their approaches.

The GSMA also today released its report, ‘Cross-Border Data Flows: Realising Benefits and Removing Barriers’, which describes the benefits of global data flows for individuals, businesses and governments, and explores the damaging impact of increased data localisation measures, which can either require companies to store data locally, or even prohibit companies from transferring personal data altogether. The report calls for governments globally to commit to removing unnecessary localisation measures and enable data to flow cross-border through improved approaches to protecting people’s data.

The ‘Regional Privacy Frameworks and Cross-Border Data Flows’ report is available here in English.

The ‘Cross-Border Data Flows: Realising Benefits and Removing Barriers’ report is available here in English.

source: https://business.financialpost.com

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Unlocking the value of data key to UK economic growth

The Scottish government has identified data-driven innovation as a key area for potential economic growth, and they plan to invest accordingly. Rachel Aldighieri, MD of the DMA, highlights the need for cross-sector collaboration to discover the true worth of data.

Earlier this month, Theresa May signed the Edinburgh and South East Scotland City Region Deal with Nicola Sturgeon. Along with other cultural and economic developments, the deal seeks to invest in the fintech, tech and AI sectors, and will ring-fence money to develop data storage and analysis centres in the Scottish capital.

Key commitments include £300m for world-leading data innovation centres; a £25m regional skills programme to support improved career opportunities for disadvantaged groups; and £65m of new funding for housing to unlock strategic development sites.

Over recent years, the Scottish Government has regularly issued support for the tech, data and marketing industries, identifying the central belt as a key area for growth. The value of the digital economy in Scotland was estimated to be £4.45 billion in 2014. Data-driven innovation alone has the potential to deliver £20 billion of productivity benefits for the economy over the next five years.

The prize is an innovative, growing economy.

Advertising and marketing are at the heart of the UK economy and play a vital role in driving economic growth. Annual UK exports of advertising services are worth £4.1 bn and every £1 spent on advertising returns £6 to the economy, resulting in £120bn to UK GDP.

The Scottish government’s recent investment should provide a platform for the rest of the UK to build on – a pilot project that will highlight the potential of the data and marketing industries to continue to drive the post-Brexit British economy.

Marketers need training in data-related skills

The publicity of the Edinburgh and South East Scotland City Region Deal should help to put the data and marketing industries on the radar of those making career choices in the future.

However, the industry needs to develop stronger ties with academic institutions to increase awareness about the skills required for a role within the data-driven industries and provide insights into the career prospects that these positions can offer. DMA Talent runs a series of Creative Data Academies around the UK to provide practical learning opportunities for young talent interested in a career in the data and marketing industry. Working with Scottish universities, we’ll be developing this programme with a long term aim of reaching schools and colleges throughout the UK.

As both the Scottish and UK governments have realised, businesses will need to upskill in areas concerned with data and its value to business. The recent ‘Professional skills census 2018’ from the Institute of Direct and Digital Marketing (IDM) highlights ‘data-related skills’ as a key area with skills gaps that need to be addressed. In a post-GDPR era, marketers are held more accountable for their actions, but they must receive relevant training and guidance to better understand their evolving roles – where processing consumer data and interpreting it are now key areas of their job description.

Developing an ethical framework for processing data The DMA’s ‘Data privacy: What the consumer really thinks’ report highlights that 88% of consumers believe transparency is key to increasing trust in how their data is collected and used. The research also revealed an important change in attitudes is underway, with more than half (51%) of the respondents viewing data as essential to the smooth running of the modern economy, up sharply from 38% in 2012.

Ultimately, consumers want more control over their personal information but the industry can do more to increase consumer trust, define best practice, and safeguard data usage. The DMA Code provides a series of core guiding principles to our membership for processing consumer data and it encourages best practice within the marketing and data industries.

We are working with our members to give businesses a better understanding of the values of data and shape the responsible route forward. However, an ethical framework for processing data that extends beyond our industry will be key if the UK economy is to thrive on the opportunities presented by technological advances.

The government’s development of the Centre for Data Ethics and Innovation will go some way to dealing with the ethical issues raised by rapidly-developing technologies such as artificial intelligence (AI).

The Centre for Data Ethics and Innovation will encourage discussion and research into how data and AI are used in terms of governance and regulation, but more investment will be required for the rest of the UK to follow Scotland’s lead in seeking data-driven innovation.

It is only by putting the customer first and embedding an ethical approach to business culture that consumers and organisations alike will be able to take full advantage of the data revolution. If we don’t get the balance right between data privacy and data-driven innovation, personal data may be misused by some businesses as technology advances. Technology often shapes an organisation’s customer engagement strategy, but our research has shown that trust will influence how receptive and likely consumers are to use it. A practical, universal framework is needed but this will require investment and cross-industry collaboration.

The department of Digital, Culture, Media, and Sport (DCMS) works closely with the DMA on championing innovation and evolution in the data and marketing industries, and the DMA welcomes future discussions around how we can develop and implement such a framework.

To propel the discussion forward, the DMA and DMA Scotland will launch a new initiative entitled Value of data.

This work will seek partnerships with government, businesses and educational institutions to develop a consumer-focused mindset within the data and marketing industries.

Led by Chair Firas Khnaisser (Standard Life) and Vice Chair Derek Lennox (Sainsbury’s Bank), Value of data will help businesses to responsibly deliver value to their customers.

The campaign will provide an engaging, navigable roadmap through a challenging ethical and legal landscape to allow innovative and data-led approaches to customer engagement to thrive. And we’ll do it all with a future-focus: nurturing local and young talent.

Ultimately, the Value of data will develop a true appreciation of the worth of data so businesses can build stronger, more profitable relationships with consumers – responsibly, sustainably and ethically.

The DMA are ready to work alongside our membership, the wider marketing industry, and UK Government to make this a reality in the not too distant future.

source: www.thedrum.com

$1 Trillion Boost to Asean GDP From Digital Economy

The digital revolution that has become such a powerful force for global change is still in early days in the ASEAN member states. ASEAN’s digital economy represents only 7% of its GDP, compared with 16% in China and 35% in the US, Bain said in a report on Monday. However, the region has much to gain by laying the foundation for the digital economy to power and accelerate intraregional trade and growth (what we term “digital integration”). Digital integration will be critical for ASEAN businesses to compete at home and overseas—it has the power to turn small and midsize enterprises (SMEs) into regional and global players. Digital integration could deliver a $1 trillion rise in GDP in ASEAN by 2025.

Getting there will take a significant effort. While enhancements have been made across ASEAN, broadband coverage needs to improve in rural areas, and advanced digital tools need to become more affordable for SMEs, among other challenges. Also, to help individuals and businesses across the region benefit from digital opportunities, member states will need to accelerate and coordinate their initiatives. The results can be dramatic: ASEAN businesses would have the opportunity to leapfrog those in other major economies.

bain infographic

content nain

source: www.bain.com

Report here

Regulating a Digital Economy: An Indian Perspective

The “fourth industrial revolution” which has been characterised by end-to-end digitalisation has led to unprecedented increases in connectivity and data flows. By 2017, Asia had the largest number of internet users in the world, with 1.9 billion people online.

Joshua Meltzer, Senior Fellow, Global Economy and Development at the Brookings Institution, spoke about regulating the digital economy at a Brookings India Development Seminar on April 20, 2018.

In 2014 cross-border data flows were 45 times larger than in 2005, raising global gross domestic product (GDP) by approximately 3.5 per cent, equivalent to $2.8 trillion dollars in 2014. According to the World Bank, it is expected that a 10 per cent increase in internet penetration in the exporting country would lead to a 1.9 per cent increase in exports. In fact, in the U.S. alone internet and data use increased GDP by 3.4-4.8 per cent, as per estimates of the United States International Trade Commission.

In India, the digital economy is expected to contribute $550bn-$1tr in GDP by 2025, and add 1.5-2 million jobs by 2018 through its Digital India initiative.

The economic opportunities from technologies such as cloud computing, big data and the internet of things are also not limited to the IT sector but are economy-wide, including in sectors such as manufacturing and agriculture, Meltzer argued based on his working paper “Regulating for a digital economy: Understanding the importance of cross-border data flows in Asia”.

Over 40 per cent of India’s goods and services exports consist of software services and IT-enabled services (ITES) from financial analysis, accounting, medical transcription to the provision of applications for smartphones. Cross-border data flows remain vital for India’s exports of services.

Governments, however, are increasingly introducing measures that restrict data flows.

In order to build the digital economy, India will need to determine a fit-for-purpose regulation especially in privacy, consumer protection, intellectual property and financial regulation.

Cross-border data flow restrictions can take one of several forms, from restrictions on data being transferred outside national borders and requiring prior consent for global transfers. According to a study by Bauer et al, the cost of proposed and enacted data localisation measures in India would reduce its GDP by 0.1 per cent.

Meltzer argued that restrictions on cross-border data flows harm both the competitiveness of the country implementing the policies and other countries that rely on that data from those countries.

In India, a few examples of government regulations and rules include the Information Technology Rules (2011) that limits cross-border transfer of sensitive personal data. The National Data Sharing and Accessibility Policy (2012) which requires government data be stored in India, particularly for cloud providers. The Companies (Accounts) Rules (2014) which requires backups of financial information, if stored overseas, to be stored in India. The National Telecom M2M roadmap (2015) which requires gateways and app servers that serve Indian customers to be located in India.

Data flow restrictions are enacted with several goals in mind – from protecting citizens’ personal privacy, to ensuring national security and protecting local businesses. The capacity to move large quantities of data seamlessly and rapidly across borders can undermine domestic regulatory standards in areas such as privacy and consumer protection.

Meltzer argued that such data restrictions limit access to digital commerce networks and online resources and the ability of businesses to synthesise large data sets, on a wider scale they affect business models, reduce productivity, innovation as well as business competitiveness by forcing businesses to invest in lower quality data facilities.

So, while this wave of digitisation has massive economy wide positive impacts, data localisation could have massive economic costs, he added.

Meltzer recommended that the realisation of legitimate regulatory goals such as privacy and security must happen alongside maximising the economic and trade opportunities cross-border data flows offer. The focus for regulators needs to be using existing technologies to harness economy-wide benefits.

Robust domestic privacy laws that manage risks and maximise opportunities and the proper enforcement of security protocols through laws offer a way of ensuring data restrictions don’t negatively impact businesses and trade flows.

At the centre of all of this lies building a trustworthy environment where mutual assistance is offered and data-sharing agreements and contracts are negotiated bilaterally and multilaterally. In essence, government backdoors that erode trust in the internet must be avoided under any circumstances.

The discussants during the seminar provided unique perspectives and critiques to some of Meltzer’s arguments.

Former diplomat Asoke Mukerji spoke about how interdependent countries were when it came to data flows. He focused on how in addition to maximising the impact of data flows for economic growth, India also needs to look at data and its flow in terms of its socio-economic sustainable development goals, anchored in its inclusive “Sabka saath, Sabka vikas” policy.

The focus of data and data flows in India remains as much on the citizen as on the market, he said.

Bringing an aspect of human nature as well as the issue of the concentration of data in the hands of a few private players, Mudit Kapoor, associate professor at the Indian Statistical Institute, warned of the pitfalls of this free market of digital data flows.

He pointed out that flow of data is distinct from flow of goods and services across borders. This is largely due to the inter-relationship between industry and security concerns of each country. Given the asymmetry in data-sharing rules between companies and government agencies across the world, we are likely to over-simply the true and complex nature of international data flows by treating it like any other commodity or services.

Kapoor also highlighted the markets for fake news and the limited capacity of the governments to regulate such markets. These can have phenomenal implications on institutions in democratic countries.

Avik Sarkar, OSD of the Data Analytics Cell at NITI Aayog, spoke about the digitisation efforts of the government, giving examples of how machine-learning, artificial intelligence and big data analytics could help bring about profound impacts on policies and programmes, especially those in health and early disease prevention.

In order to build the digital economy, India will need to determine a fit-for-purpose regulation especially in privacy, consumer protection, intellectual property and financial regulation. The big push needs to be from the top, ensuring governments at all levels – national, state and local — go digital and consider the delivery of services through digital technologies.

Overall the vibrant debate on this forum and many alike on cross-border data flows in India remains a part of a larger global discussion on the need for an international framework to provide predictability, security and stability of cyberspace.

source:www.brookings.edu

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