Digital Economy in Indian Context

Abstract

Digital Economy refers to an economy that is based on digital technologies. The growth, integration and sophistication of information technology and communications is changing our society and economy. Digital technology in the form of the Personal Computer and the Internet has already transformed work, education, government, entertainment, generating new market opportunities and having a major economic impact across a broad range of sectors. In the ICT of the digital economy, India appears to have comparative advantage to grow to global stature. No doubt, the digital economy has the risks and problems of Security and Privacy which are more in the case of India subject to internal and external risk. The roll out of e-Government services in India is currently lightly well, but policies of digital inclusion should play an advanced role in this development, in order to encourage the bridging of the 'digital divide'. Limited availability of Internet infrastructure, High cost of access and usage, Lack of awareness and low digital literacy, Narrow range of applications and services and unfavorable business environment.

Full text

JECET; Sept. 2014-Nov. 2014; Sec. B Vol.3.No.4, 2026-2031. E-ISSN: 2278–179X
Journal of Environmental Science, Computer Science and
Engineering & Technology
An International Peer Review E-3 Journal of Sciences and Technology
Available online atwww.jecet.org
Section B: Computer Science
Research Article
JECET; September 2014-November 2014; Sec. B, Vol.3.No.4, 2026-2031.
2026
Digital Economy in Indian Context
Satish Patel
Centre for studies in Rural Management, Gujarat Vidyapith, Gujarat, India.
Received: 19 October 2014; Revised: 03 November 2014; Accepted: 08 November 2014
Abstract: Digital Economy refers to an economy that is based on digital
technologies. The growth, integration and sophistication of information technology
and communications is changing our society and economy. Digital technology in the
form of the Personal Computer and the Internet has already transformed work,
education, government, entertainment, generating new market opportunities and
having a major economic impact across a broad range of sectors. In the ICT of the
digital economy, India appears to have comparative advantage to grow to global
stature. No doubt, the digital economy has the risks and problems of Security and
Privacy which are more in the case of India subject to internal and external risk. The
roll out of e-Government services in India is currently lightly well, but policies of
digital inclusion should play an advanced role in this development, in order to
encourage the bridging of the ‘digital divide’. Limited availability of Internet
infrastructure, High cost of access and usage, Lack of awareness and low digital
literacy, Narrow range of applications and services and unfavorable business
environment.
Keywords: ICT, Economy, Technology, Development.
INTRODUCTION
Digital Economy refers to an economy that is based on digital technologies. The digital economy is
also sometimes called the Internet Economy or Web Economy. The digital economy became the
model global economy as the last stage for the devolvement of the economy and it considers as a

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result of using the information technology in different economic fields, such as what happened in all
our life activities.
According to Mesenbourg1, three main components of the ‘Digital Economy’ concept can be
identified:
 Supporting infrastructure (hardware, software, telecoms, networks, etc.
 e-business (how business is conducted, any process that an organization conducts over computer
networks)
 E-commerce (transfer of goods).
But new applications are blurring these boundaries and adding complexity – for example, social
media and Internet search.
WHY IT IS IMPORTANT
The growth, integration and sophistication of information technology and communications is
changing our society and economy.
In this digital economy, consumers are becoming more powerful and companies find themselves with
new avenues for building competitive advantage. Mobile devices, social networking, cloud
computing, grid computing and other technologies are profoundly transforming the relationships
between businesses and their customers.
Digital technology in the form of the Personal Computer and the Internet has already transformed
work, education, government, entertainment, generating new market opportunities and having a major
economic impact across a broad range of sectors.
Digital networking and communication infrastructures provide a global platform over which people
and organizations devise and employ new business strategies, interact, communicate, collaborate and
seek information regardless of time and location.
TECHNOLOGY DEVELOPMENT
The digital economy is the result of the transformational effects of new General-Purpose
Technologies (GPT) in the fields of information and communication. It has impacted all the sectors of
the economy and social activities, for instance: retail, transports, financial services, manufacturing,
education, healthcare, media and so on. It has implications much beyond the Information and
Communication Technology (ICT) sector. In addition, the internet is empowering people in a new and
different way to create and share their ideas, giving rise to new content, entrepreneurs and markets.
Four specific technology developments are driving a tectonic shift in the digital ecosystem:
 Mobile: Widespread penetration and evolution of feature-rich, smart mobile devices
 Social: Ever-present social networking and user-generated content
 Cloud: On-demand, real-time access to supercomputer power and unlimited storage
 Internet of Things: Convergence between the real and the virtual worlds
According to Deloitte & Touche Consulting2, there are six determinative stages, which every
government and organizations of local administrations are called to pass, in order to update
themselves and be able to provide services 24 hours a day and 7 days a week, from everywhere. The
stages are as follows:-

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 Information Publishing and Dissemination
 Two-Way Transactions system
 Multipurpose Portals usage
 Portal Personalization needed
 Clustering of Common Services to all and everywhere
 Full Integration and Enterprise Transformation to all
INDIAN PERSPECTIVE
Minimum government maximum governance: e-Government is about using the tools and systems
offered by Information and Communication Technologies (ICTs) in order to proffer better and
advanced public services to citizens and businesses. ICTs are already widely used by government
bodies, but effective e-Government is related with overall reorganization of businesses and processes
in a way that public services will be delivered more efficiently and effectively to the people who need
to use them. Proper application of ICTs and of the various tools to functions of e-Government services
leads to easier, quicker and cheaper business transactions of all citizens, enterprises and organizations
with the government. Here some indicator in terms of India shows Exhibit3 below.
Exhibit: 1
Exhibit: 2
India’s projected 330 million to 370 million Internet users will form the second-largest Internet
population in the world by 2015 at current 120 of year 2011
India’s Digital landscape statistics
nov
-
2011
10 internet users per 100 people
61 mobile user per 100 people
5 personal computer 100 people
4 mobile internet users per 100 people
1 3G Subscriptions per 100 people
3 Household broadband penetration per 100
households
$61 Median monthly cost of 1 Mbps download
0.3 % Online retail share of retail
1.6 % Internet contribution to GDP
2.0% Internet contribution to GDP growth

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Exhibit: 3
India has the potential to more than treble iGDP to about $100 billion by 2015
Internet's contribution to India's GDP
Present Projection
Total 30
3X
89
3.5X
104
Trade balance 10 30 29
Public expenditure 2 6 8
Private investment 8 22 32
Private consumption 9 31 35
Sector/ Year 2011 2015
AS PER
CURRENT
2015
AS PER ACCELERATED
Exhibit: 4
Internet foundations statistics
2011
Human
Capital Base
Infrastructure Internet
Infrastructure Internet
accessibility
39 27 17 15
Ease of Internet
entrepreneurship Ecommerce
enablement Financial capital Business environment
29 30 25 44
Global
connectedness
30
SWOT ANALYSIS
The process of SWOT involves four areas of consideration: strengths, weaknesses, opportunities, and
threats. Here need to compare with economy and digital economy factor of India in terms of
SWOT4, 5.
INDIAN ECONOMY DIGITAL ECONOMY
STRENGTHS
Huge labour force Hope, Innovation and vision
High cultivate land and Diversified nature Saving expensive employment costs
Skilled manpower availability Make India mission by government
Extensive higher education system Build “a knowledge society” by 65% youngest
country in the world
High growth rate of economy Borrow solutions from others sector
Rapid growth of IT Recruitment possibility of foreign technology
natural resources Possibility of Conversion to skill force
WEAKNESSES
Agriculture which contributes 23% of GDP Unemployment (unskilled)
High unemployment rate Low literacy rates Government websites are unfriendly-user and
updating
Poor infrastructural facilities High illiteracy rates related to IT
Low productivity Skilled IT specialized human capital moved to
other country
Huge population leading to scarcity of resources Conservation in trying eServices and awareness
build up

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Low level of mechanization Workers and older generation are computer
illiterate
Unequal distribution of wealth Infrastructure need huge money
Rural-urban divide, leading to inequality in living
standards Demographic and Diversity change
OPPORTUNITIES
Huge agricultural resources, fishing, plantation
crops, livestock Political willingness
Vast forest area and diverse wildlife Broadband facilitates faster connection
Huge natural gas deposits found in India servicing particular needs of individuals and
groups
Huge population of Indian Diaspora in foreign
countries (NRIs) Increase citizen participation thereby induce
democratic governance
Scope for entry of private firms in various sectors
for business. Reduce opportunities for corruption and promote
transparency
Inflow of Foreign Direct Investment is likely to
increase in many sectors IT-proficient people can have better opportunity
for employment
Huge foreign exchange earning prospect in IT and
ITES sector Stimulate the use of ICT by the population
Opportunity for MNCs for sales Reengineer administration processes thereby
improve efficiency
THREATS
Global economy recession/slowdown Cyber terrorism and cyber crimes
High fiscal deficit Higher cost of living and higher broadband
subscription
Threat of government intervention in some states. Dependency on IT resource (technical problems
will disrupt the entire networks)
Volatility in crude oil prices across the world. Revolution of the public sector
Growing import bill Security breach and copyright issue
Population explosion, rate of growth of population
still high. The rapid development of mobile and SMS
technology
Agriculture excessively dependent on monsoons. Social and ethical concerns
CONCLUSION
The first task of the said digital economy that of the Indian economy, is development and
diversification and global competitiveness. In the ICT of the digital economy, India appears to have
comparative advantage to grow to global stature. No doubt, the digital economy has the risks and
problems of Security and Privacy which are more in the case of India subject to internal and external
risk. The roll out of e-Government services in India is currently lightly well, but policies of digital
inclusion should play an advanced role in this development, in order to encourage the bridging of the
‘digital divide’. Many strengths and opportunities fuel the development of India, while at the same
time new threats and challenges arise. The impact of the Internet in India is constrained by current
gaps and obstacles in the Internet ecosystem due to the following obstacles : Limited availability of
Internet infrastructure, High cost of access and usage, Lack of awareness and low digital literacy,
Narrow range of applications and services and un unfavorable business environment.

Digital ... Satish Patel
JECET; September 2014-November 2014; Sec. B, Vol.3.No.4, 2026-2031.
2031
* Corresponding Author: Dr. Satish Patel
Asst Professor, Centre for Studies in Rural Management, Gujarat Vidyapith, Randheja,
Gandhinagar, Gujarat, India
REFERENCES
1. T.L. Mesenbourg, Measuring the Digital Economy, U.S. Bureau of the Census.2001.
2. Deloitte & Touche Consulting, At the Dawn of E-Government: The Citizen as Customer,
2000.
3. McKinsey & Company, Digital Consumer Research, 2012.
4. Department of Telecommunications, Draft National Telecom Policy, 2012.
5. World Economic Forum, Global information technology report, 2010, 2011.