Print Edition - 2016-08-14  |  Free the Words

Going digital

  • Nepal should perhaps take a leaf out of Thailand’s book and establish a ministry for digital economy
- BIMAL PRATAP SHAH, Kathmandu
We will not see our own version of global companies like Uber, Airbnb, and eBay anytime soon, because of Nepal’s backward looking policies, laws, and regulations that are anything but startup friendly

Aug 14, 2016-As the saying goes, ‘A digital economy is born when digital computing technologies enable economic activities.’ Some with the mindset of a bygone era might find it hard to fathom the dictum, but the digital economy has undeniably emerged as an unstoppable force that is growing at a rate of 10 percent per annum—triple the rate of overall global economic growth.

In the last year alone, the global digital economy generated $24 trillion in e-commerce. According to one study, increased use of digital technology could add as much as $1.36 trillion to the GDP of the world’s top 10 economies in 2020. We also saw governments worldwide committing to the digital economy by announcing forward looking strategic digital plans, like India’s ‘Digital India’, Kenya’s ‘Vision 2030’ and the UK’s ‘Digital Transformation Plan’, 

to name a few.

Fascinating startups

A national level digital strategy is a must, if a country is to prosper. The strategies, however, are not to be formulated in an ad-hoc manner, but with the deep understanding that in the new digital environment, liberalised trade barriers and real-time market linkages allow companies to become global competitors quickly. The new normal is no longer about startups aspiring to operate only in the local sphere, but globally from their inception. 

For instance, Uber’s and Airbnb’s disruptive technology and explosive growth make them one of the most fascinating companies in the midst of a digital revolution. Interestingly, both startups have global presence and cater to the ‘global citizens’.

Airbnb is a platform founded in 2008 that allows homeowners across the planet to rent out their spare rooms. The startup has already taken a large share of the travel and tourism market by offering travellers the opportunity to choose between the two million rooms and properties listed on the AirBNB website. It is already operating in 34,000 cities in 191 countries. 

Uber, founded in 2010 is another 

startup that has also taken the world by storm. In New York City alone, Uber has served 100 million trips. The company’s current valuation of $70 billion is bigger than the market cap of General Motors and Ford Motor Company. Uber’s rise is due to age-old regulations in many cities that make traditional taxi vehicles significantly more expensive than regular cars. 

The big hotels and taxi services were not agile enough to adapt to the rapidly changing socio-technological landscape, providing space for Airbnb and Uber to disrupt the status quo. If both the companies are not careful, they could be disrupted as well. And do avoid this fate, they are innovating at a mind boggling rate.     

At home, we will not see our own version of global companies like Uber, Airbnb, and eBay anytime soon, because of the country’s backward looking policies, laws, and regulations that are anything but startup friendly. Many advanced countries like the US, the UK and South Korea have had forward looking policies, laws, and regulations for quite some time that enabled a vibrant digital economy to flourish. The UK’s digital strategy, it seems, is calibrated regularly to remain relevant. In 2016, the UK ranked first in the UN E-government Survey’s E-government Development Index. Nepal’s rank moved up to 135 from 165 in 2014. It is hard to believe, but it looks as though the governments of the last two years were somewhat serious about electronic governance, if not digital economy. 

Radical and revolutionary

The UK’s 2015-2018 innovation strategy has five objectives. The first is to encourage digital innovation by supporting digital innovators. The second is championing digital innovation by putting the needs of the users at the centre. The third is equipping digital innovators with the technical and business expertise needed to drive the development of new capability. The fourth is developing infrastructure, platforms, and ecosystems so that innovators can enter the global market with confidence. The fifth is ensuring sustainability by linking  technical capabilities with commercial, legal, and regulatory context of innovation. 

Most government agencies established in the last century are ill-suited to manage the affairs of the new digital age. This has forced many countries to establish new government agencies with the responsibility to manage their digital economy. For instance, Thailand’s National Legislative Assembly unanimously approved legislation establishing a new ministry of digital economy and society. Looking at the sorry state of digital economy in Nepal, it looks as though the Himalayan nation should follow in the footsteps of Thailand and establish a ministry of digital economy.

Nepal missed the industrial revolution. If it is not to miss the digital revolution, the government has to establish a ministry of digital economy by the end of this year. Expecting infrastructure oriented agencies like the Ministry of Information and Communication and the Ministry of Science and Technology to come up with transformational policies, regulations and programmes can be futile. The two ministries should be left to do what they were originally meant to do. 

The ministry of digital economy should work towards improving the global trade system with direct focus on commerce and digital trade and also improve access of enterprises to the digital economy and infrastructures. Furthermore, the ministry should  assure legislation and regulations to support digital innovation in health, government, trade, agriculture, tourism, business, education and industrial sectors. 

In the 21st century, anything that is not digital is neither  radical nor revolutionary.

Shah is the co-author of ‘Strategic IT Planning for Public Organisations: A Toolkit’ published by the UN in 2009

 

Published: 14-08-2016 18:07

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