Digital Ecoņomy introduction and statistics

Digital Ecoņomy introduction and statistics

1. Digital Economy and Service Sector Smt. Shruthi DR, Junior Faculty Center for e-Governance and Data Analytics, ATI, Mysuru

2. Introduction TechCrunch , a digital economy news site, noted… Uber , the world’s largest taxi company, owns no vehicles… Facebook ( Metaverse ), the world’s most popular media owner, creates no content… Alibaba , the most valuable retailer, has no inventory… Airbnb , the world’s largest accommodation provider, owns no real estate Example: Netflix UPI …….

3. Trends in emerging digital technologies The evolution of digital economy is closely associated with progress in several emerging technologies . Some recent trend are: Internet of Things ( IoT ) Cloud computing 5G mobile broadbands (1000 times more data than today’s std.) Automation and robotics Artificial intelligence and data analytics Blockchain technologies (distributed ledger technology)

4. 1. Emergence of the Internet (1990s): 2. E-commerce and Online Marketplaces (Late 1990s - Early 2000s): 3. Web and User-Generated Content (Mid-2000s): 4. Mobile Revolution (Late 2000s - Early 2010s): 5. Big Data and Analytics (2010s): 6. Sharing Economy and Gig Economy (2010s): 7. Blockchain and Cryptocurrencies (2010s): 8. Artificial Intelligence and Automation (Present): 9. Digital Transformation (Present): Evolution of Digital economy

5. Challenges in Digitising the Economy:  Digital Divide:  Despite progress, a digital divide persists, with limited internet and technology access in rural areas, leaving around 50% of the population offline.  Privacy Concerns:  The rise in digital transactions and data sharing has raised significant privacy and data security concerns, addressed by the Personal Data Protection Bill, which presents regulatory complexities.  Cybersecurity:  As digitization increases, the risk of cyber threats and attacks grows. India faced 91 lakh cybersecurity incidents in 2022, ranking third globally in the average cost of data breaches.  Skill Gap:  Rapid technological change necessitates a skilled workforce. Only 42% of India’s workforce possesses digital skills, highlighting the need for digital literacy and upskilling . 

6. Measures Needed to Address Challenges:  Broadband Expansion : Accelerate efforts to expand broadband connectivity in rural and remote areas, leveraging public-private partnerships like the BharatNet project.  Digital Literacy Programs:  Implement widespread digital literacy programs for urban and rural populations, such as the Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA).  Data Protection Laws : Enact robust data protection laws and regulations, like the Digital Personal Data Protection Act, of 2023, to ensure privacy and responsible data handling.  Cybersecurity Framework:  Strengthen cybersecurity infrastructure and awareness, with a focus on collaboration between government agencies and the private sector, as outlined in the National Cyber Security Policy, 2021.  MSME Support:  Encourage Micro, Small, and Medium Enterprises (MSMEs) to adopt digital tools and e-commerce platforms through incentives and training programs to enhance competitiveness. 

7. What should governments do? 1 . Estimate the size of the “digital economy” to better target digital policies The need to expand the evidence base increases as digital transformation intensifies, and its societal and economic impact widens. It is crucial to use traditional and non-traditional techniques to improve the timely measurement of the digitalisation of the economy to support policy makers in designing and implementing public policies fit for the digital age.   2. Promote AI governance rooted in values-based principles As generative AI and foundation models enable increasing AI generality, countries’ national AI policies and strategies must respond to the growing demand for AI compute capacity, address AI’s environmental impacts and mitigate risks related to privacy, intellectual property rights and information integrity.

8. 3. Address emerging policy and regulatory challenges in the connectivity ecosystem Anticipate the regulatory and policy challenges posed by an evolving connectivity ecosystem, as terrestrial wireless networks increasingly integrate with non-terrestrial solutions like drones, airplanes, and satellites.   4. Foster the uptake of technologies to boost innovation and bridge digital divides Access to digital technologies and the ability to use them effectively are critical not only for digital innovation, but also for equal opportunity and inclusion. Investing in skills and creating a level playing field among firms for access to key inputs, including data, are key in this respect.

9. 5. Shape a positive immersive future to protect privacy and safety New approaches beyond traditional consent-based models will be needed to protect privacy in virtual reality given that body tracking data is essential to creating such experiences. VR mental and physical safety must also be carefully considered from the outset, especially for children and in moving vehicles, and safety by design can play an important role in this respect.   6. Raise awareness and address the risks of digital environments for mental health As people spend an increasing amount of time on line, and digital environments become more immersive and “real”, public policies should target negative behaviours in digital environments and how to manage their impacts, especially for those most at risk, including girls .

10. Digital economy Components   Electronic devices  Internet   E-commerce   Social media  Artificial intelligence (AI ) Cloud computing 

11. New Paths for Value Addition, Structural Transformation and Development

12. A representation of Digital Economy These components are being used in various ways as a basis for measuring the extent and impact of the digital economy. India’s digital economy is expected to witness exponential growth to $800 billion by 2030. This is because of rising internet penetration and increasing income.

13. Digital economy 1 video

14. India Stack India Stack is a set of APIs that allows governments, businesses, startups and developers to utilise an unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery . Presence less layer Paperless layer Cashless layer Consent layer

15. APIs included in India Stack: Aadhaar Authentication Aadhaar e-KYC eSign Digital Locker Unified Payment Interface (UPI) Digital User Consent – still work in progress.

16. Digital Economy contribute to India’s GDP: “ The digital economy used to be 5% of the total GDP in 2014 and revolved primarily around IT and ITeS , but today we are at 12.5% [of GDP] and hard charging to about 20-21% of the total GDP by 2025-26 . Percentage of global GDP in digital economy Digital economy to contribute 30% of global GDP and create 30 million jobs by 2030

17. key service sectors within the digital economy: 1. E-commerce 2. Online Streaming and Entertainment 3. Digital Advertising and Marketing 4. Online Financial Services 5. Software as a Service (SaaS) 6. Online Education and E-learning 7. Gig Economy Platforms 8. Cloud Computing Services 9. Telecommunications and Internet Service Providers 10. Healthtech and Telemedicine