"Thanks to broadband connectivity, a rice growing village in Thailand saw its profits soar by 300 percent as it began selling its rice on-line," disclosed Malcolm Johnson, Deputy Secretary General, International Telecommunication Union (ITU) while having a virtual conversation (Bridging the digital divide) last week via Zoom with Ravi Agarwal, Managing Editor of Foreign Policy Magazine.
In a world that is fast changing from global mode to self-sufficiency mode, Pakistan needs to review its value and supply chains while adapting to the digital world at the earliest. The digital technologies ensure enhancement of productivity and profitability eliminating waste of time and space.
Digital Economy incorporates all economic activity reliant on, or significantly enhanced by the use of digital inputs, including digital technologies, digital infrastructure, digital services and data. It refers to all producers and consumers, including government, that are utilizing these digital inputs in their economic activities.
Depth and breadth of integration, control over microeconomic elements, dominance of service economy, dominance of information capital etc. are some of the defining features of digital economy.
A digital economy is one that is based on information technology (IT), computers, the internet, and the free flow of data and communications on a global scale, both within and between industries, to facilitate commerce.
The term 'digital economy' was first coined by Don Tapscott in his 1995 book, The Digital Economy: Promise and Peril in the Age of Networked Intelligence. This was among the first books to consider how the Internet would change the way we did business.
According to Thomas Mesenbourg (2001), three main components of the 'Digital Economy' concept can be identified:
E-business infrastructure (hardware, software, telecom, networks, human capital, etc.),
E-business (how business is conducted, any process that an organization conducts over computer-mediated networks, transfer of goods, for example when a book is sold online).
New applications are blurring these boundaries and adding complexity; for example, social media and Internet search.
In this new economy, digital networking and communication infrastructures provide a global platform over which people and organizations devise strategies, interact, communicate, collaborate and search for information. The digital economy has had a substantial impact on retail sales of consumer goods. One effect has been the fast proliferation of retailers with no physical presence, such as eBay or Amazon. Additionally, traditional retailers, like WalMart and Macy's, have restructured their businesses to adapt to a digital economy. Others, such as Bebe stores have worked with outside vendors to completely convert their businesses that is exclusively digital. These vendors, such as IBM, Microsoft and Branded Online, have enabled smaller retailers to compete with large, multi-national established brands.
Advancements in Information and Communication Technology (ICT) have significantly reduced the cost associated with the organization and coordination of complex activities over a long period. Large businesses are increasingly able to manage their global operations on an integrated basis from a central location that may be removed geographically from both the locations in which the operations are carried out and the locations in which their suppliers or customers are located. Consequently, IT allowed to expand access to remote markets and thus, provided an opportunity to supply those goods and services across the borders.
Due to its ability to bridge the information asymmetry between supply and demand, data now has an economic value. When platforms compile personal data, they gather preferences and interests, which allow companies to exert a targeted action on the consumer through advertising. Algorithms classify, reference and prioritize the preferences of individuals to better predict their behavior.
Pakistan's own efforts on the digital economy front have so far remained confined mostly to announcements of promises to removing the use of paper from all the institutions and replaced by Mobile and Web applications.
The project as envisaged consists of four major building blocks. These blocks are later sub-divided into more categories.
1- Access and Connectivity: Access to the internet is one of the major building blocks of Digital Pakistan. This phase will be dealing with improving the coverage of telecom companies including PTCL. More areas will have access to the 3G and 4G networks.
2- Digital Infrastructure: This includes online payment gateways and similar facilities to minimize human efforts.
3- eGovernment: i- Land records, registrations, transfers and retention orders will be online; ii- Applying for any government document, visas, domiciles, birth certificates, driving license, car registrations, new gas or electricity connections and the list goes on; iii- Jobs will be posted online and the process will be based on online announcements of vacancies, offer letters, joining dates and more; iv- Just log in to the Police portal and lodge an FIR request. The requests and responses are monitored by a department that supersedes all the powers of local police stations; 4- Digital Skills and Trainings: I-Digital Pakistan will enforce better education standards focusing on IT; ii- Acquire skills and then educate others. Modern IT skills are also one of the building blocks of this project; iii- Digitize your businesses and avoid using the old methods of accounting. This way, the trend will keep growing.
The government needs to overhaul the whole banking infrastructure and encourage businesses, retailers, petrol pumps, PIA, Railways ticketing, superstores, schools and colleges to introduce payment gateways and banks should offer credit cards to businessmen and especially to government employees, since they will use such services when they run short of funds, not falling prey to usurers.
The innovative digital payments will remove their financial constraints and the funds will be utilized based on a credit limit for 45 to 51 days and the bills can be paid through salaries, decreasing chances for default.
It would be great to boost and promote digital services, paving the way for international digital firms like Google, PayPal, Amazon, eBay, Yahoo, Alibaba Group, Stripe and Apple to enter Pakistani financial markets specially the PayPal, eBay and Amazon, which are strongly required by freelancers and authors.
Moreover, the government should establish a venture capital firm to support, incubate, accelerate and fund start-ups and accelerate the mushrooming growth of big start-ups.
Not only universal internet access is needed to accomplish this but also universal broadband connectivity has to be established across the country for the purpose. This is perhaps the costliest part of the digitizing process of Pakistan. Indeed, in the 21st century, affordable, ubiquitous broadband networks will be as critical to social and economic prosperity as networks like transport, water and power. Not only does broadband deliver benefits across every sector of society, it also helps promote social and economic development, and will be key to helping the world get the Millennium Development Goals back on track.
Small and medium enterprises (SMEs) have a key role in ensuring economic growth in a sustainable and inclusive manner. They are often the source of innovative and ICT-enabled solutions that make a long-lasting impact in global, regional and national economies, and are an important source of new jobs especially for youth. SMEs make up more than 95% of all businesses worldwide, and represent a path out of poverty for many developing countries.
The ITU works with the industry to define the new technologies that will support tomorrow's networks and services; it powers the mobile revolution, forges the technical standards and policy frameworks that make mobile and broadband possible; works with both public and private sector partners to ensure that ICT access and services are affordable, equitable and universal and; it empowers people around the world through technology education and training.
At ITU, members from the public and private sectors including small and medium enterprises (SMEs) are working together to help shape the future ICT policy and regulatory environment, global standards, and best practices to help spread access to ICT services. Public-private collaboration has always been at the centre of ITU's work. Now more than ever, businesses realize that the path to sustainable growth can be found by working closely with governments, academia, as well as other stakeholders, in a common effort to put in place the right rules to drive investment, innovation and widely shared opportunities.
As such, Pakistani SMEs would benefit a lot by obtaining ITU membership, and make profitable use of the connection especially in their efforts to convert at the earliest to digital economy.
Copyright Business Recorder, 2020
Comments
Comments are closed.