South Asia’s emerging digital transformation

NEWS COVID-19 has forced South Asia to take a quantum leap in digitalisation.

CONTEXT

The Covid-19 has resulted in a shift to remote work and online education.
This has resulted in an unprecedented spike in Internet penetration. Even smaller nations such as Nepal recorded almost an 11% increase in broadband Internet users.
The pandemic-induced suspension of bricks-and-mortar businesses spurred South Asia’s embrace of e-commerce, boosted by digital payment systems. Bangladesh alone witnessed an increase of 70-80% in online sales in 2020, generating $708.46 million in revenues.
Not only in internet services, there has been unprecedented digitisation of health-care services to provide novel solutions to the public health crises.
- For example, In India COVID-19 accelerated the launch of the National Digital Health Mission which enhanced the accessibility and the efficiency of health-care services by creating a unique health ID for every citizen.
Pandemic have transformed other sectors like e-commerce boosted by digital payment systems. For example, Bangladesh alone during the period witnessed an increase of 70-80% in online sales in 2020, generating $708.46 million in revenues.

CHALLENGES DUE TO DIGITAL DIVIDE

Biggest challenge that exists includes the issue of digital access and affordability.
For example, despite having the world’s second largest online market, 50% of India’s population are without Internet with 59% for Bangladesh and 65% for Pakistan.
51% of South Asian women were excluded from social protection measures during the pandemic due to monetary and health assistance schemes distributed online.
Children are also at the receiving end of the digital divide with 88% lacking access to Internet powered home schooling. There is fear that this disruption could permanently put children out of school, place girls at risk of early marriage, and push poor children into child labour costing economies billions of dollars in future earnings.
Businesses too have paid a heavy price for the gap in digital solutions, with many South Asian firms failing to embrace e-commerce or other cloud-based technologies to survive the financial chaos of the novel coronavirus pandemic. For example: the region recorded a 64% decline in sales, with small and women-led firms faring the worst.

DIGITAL TRANSFORMATION- THE INEVITABILITY

With adoption of advanced technologies such as cloud computing, artificial intelligence, the Internet of things, Big Data, etc., digital transformation is inevitable.
At the forefront of Asian digitalisation are countries such as Singapore, Japan, and South Korea recognised as global technological hubs.
The digital boom in the Association of Southeast Asian Nations (ASEAN) economies is pushing a “common market” initiative, fostering regional economic integration and enhancing global competitiveness.
South Asia has also made significant strides in the adoption of digital technologies with countries like Bangladesh(Digital Bangladesh Vision 2021), India taking the lead.
E-commerce has potential to drive the post-pandemic growth in South Asia, providing new business opportunities and access to larger markets.
Covid digital transformation has shown that timely, inclusive, and sustainable digital transformation can not only bolster productivity and growth but also serve as a panacea for some of the region’s socio-economic divides.

WAY FORWARD

To reap the dividends of digital transformation, South Asia needs to address legal, regulatory and policy gaps as well as boost digital skills.
Regulatory roadblocks need to be addressed as e-commerce regulations are weak in South Asia. Focus has to be there in customer protection, digital and market access regulation, etc.
Governments and businesses need to come together to revamp the education system to meet the demand for digital skills and online platforms as there would be no digital revolution without universal digital literacy.
There also needs to be stringent cybersecurity measures as crossflow of data and personal information results in vulnerabilities.
There is also a need to address constraints in interregional trade flow like regulatory barriers on currency flows which inhibits online payment to transport-related constraints for cross-border e-commerce activities. In South Asia, only a third of the inter-regional trade potential has been exploited, losing out on $23 billion in revenues
There is a need to enhance concerted collaboration at all levels between eight south Asian nations which was seen during the pandemic. During the pandemic, South Asian nations joined hands to collectively battle the crises by contributing towards a COVID-19 emergency fund, exchanging data and information on health surveillance, sharing research findings, and developing an online learning platform for health workers.

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