The tectonic shift we are witnessing in the digital era is the rapidly changing dynamics of global economics driven by unprecedented advancement in technology and computing power; and the resulting data explosion. We are rapidly progressing from a knowledge economy to a data-driven one, where ironically, the foundation is based on information asymmetry – starting with the fundamental difference in capabilities of humans vis-a-vis machines to unlock data potential. Add to that the significant investment required in technology and capabilities to build competitive advantage, and we will see the gap between businesses and even nations widen faster than ever.
Success is no more defined by or dependent on access to data, but most importantly, the company’s or nation’s ability to convert data to value. For this, we need the tech and know how to harvest the data right, develop the right insights and most importantly, put the insights to use to improve productivity, trade & innovation at a scale unimaginable till now. The data economics will not only dramatically change the rules of competition, but impact overall global trade and power equations, creating massive market disruption and new opportunities across the spectrum.
As noted author Yuval Harari had already warned us on a couple of countries leading the pack in the race for artificial intelligence (AI), and unless India evolves a mature data strategy, matching its global aspirations, India may remain ‘back of the pack’ in harnessing the power of AI for solving societal problems.
The battle for “value creation” is intense and unequal as well, but we don’t have the choice to be left behind.
As the election draws to a close, and we prepare for the next five years, which will be most crucial from a tech advancement standpoint, we must orient ourselves to look at data in an altogether different light. India needs an end-to-end data strategy that looks at strengthening our competitive advantage across the entire data value chain – from creation to innovation and impact. And we need it fast.
Overwhelming as it may seem to be, I do believe this is one of the most critical decisions facing the government that comes into power. Their action will decide whether we are known as a country that generates and stores massive volumes of data or, do we also want to take a seat at the global leadership table by significantly improving our capabilities to process the data to create economic and social value? The latter is not a given. If we want to be known for value creation the government will have to walk the talk and substantially up our investment in skill development and R&D capabilities in addition to creating the right regulatory framework that balances the need for innovation with security.
The race to leadership has already started. Most countries are in the process of figuring out their data strategies, and India needs to urgently join the debate or run the risk of being left behind.
What gives me confidence in our ability to leapfrog is that whenever we have set our mind to it, we have shown the ability to be a disruptor, and one of the most remarkable case studies is the successful deployment of digital payments at scale.
Not very long ago, banking in India meant visiting a branch and long lines. In less than a decade, technology has completely disrupted the banking landscape where everyone can access their account or transact successfully by just using their mobile phone. The Indian fintech story is the one of the best demonstrations of digital at scale and its impact. The fintech industry has seen tremendous growth, thanks to a strong push from top for financial inclusion. As per a NASSCOM-KPMG report we expect the total fintech software and services market in India, which was around $8 billion in 2016, to grow 1.7 times by 2020. The transaction value for the Indian fintech sector was approximately $33 billion in 2016 and slated to reach $73 billion in 2020 growing at a five-year compound annual growth rate (CAGR) of 22%.
This India Fintech revolution has successfully disrupted a highly traditional landscape where even banks, which are household names, had to embrace agility and re-design their product offerings including business models, proving that we as a country can absolutely disrupt as needed as long as the government and Industry works together to drive the change.
And no better time than now to do so once again by working together to create a robust end-to-end data strategy that helps us emerge a strong leader in the digital era, with a strong play in the conversion of data into value.
The job is not an easy one for sure, and I would strongly recommend the following must do’s to ensure we leverage the opportunity to the fullest:
- Government should appoint a Chief Data/Innovation officer authorised to drive the development and execution of the data strategy with focus on economic and social impact
- The development and execution strategies must be highly consultative to ensure success. This cannot be done alone by the government or Industry. We have to come together to make it real.
- Adopt a segmented approach for higher impact – we need to identify the verticals that will have the biggest impact on development and create segmented data strategy to derive the maximum benefit from innovation and trade in the segment.
- Create a forward looking regulatory framework that understands the changing landscape and is able to foster new thinking and innovation
Last but not the least, everything we do should aim to find the right balance between innovation and security. While we certainly need a strong framework that ensures data is collected only to the extent it is required, used for its explicit purpose without compromising citizens’ security, we also need to bear in mind the innovation angle.
One thing is pretty much clear. India has data, India has huge market opportunities and India has talent. It is up to us to figure out what we want to do with it. Data can be used to fuel greater innovation and trade. While it doesn’t have to be mutually exclusive, we will miss out on a major opportunity if we do not prepare ourselves to maximise our ability to fuel both.
Views are personal.
The author is president, NASSCOM