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2020 | Buch

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Digitalisation and Development

Issues for India and Beyond

herausgegeben von: Dibyendu Maiti, Dr. Fulvio Castellacci, Arne Melchior

Verlag: Springer Singapore

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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This book investigates the impact of information and communication technologies (ICTs) on development and well-being (beyond economic benefits) and highlights some emerging issues relating to the realities, constraints and digital divides with particular reference to India. It collects a series of novel contributions, studying the Indian experience in an international cross-country perspective. The book also discusses economic, social, and behavioural aspects of well-being as well as access to ICTs across regions, states and individuals to account for the digital divide. The book establishes an aggregate relationship between ICT exposure and well-being at the country level and addresses a number of fundamental issues, such as whether ICT raises the level of transparency and governance. Based on case studies and anecdotal evidence, it then further assesses the effective implementation of service delivery through ICT innovations.

The book is divided into four parts: The introductory part surveys the literature and presents background information on the Indian case; introduces the main themes on the relationships between ICT, socio-economic development and digital divides; and provides a summary and roadmap to the chapters of the book. Part II focuses on the impact of ICT on economic performance, including economic growth, productivity and trade. Part III examines the extent of the digital divides in India, including international, regional as well as inter-personal inequality. Finally, Part IV investigates the impact of ICT on governance, users’ well-being and social outcomes. Combining insights from analyses of a variety of socio-economic dimensions related to digitalisation, this book is relevant for a wide range of scholars and researchers across disciplines, as well as practitioners and policy-makers. While the book has a main focus on India, various contributions take an international cross-country comparative perspective, and the results have general relevance for digitalisation and development. On the whole, the main message of this book is that the impact of ICTs is contingent upon other assets, capabilities and institutional conditions. National policies should, therefore, not only promote digitalization as such but also ensure its co-evolution and complementarity with a variety of other country-specific factors.

Chapter 'Digitalisation and Development: Issues for India and Beyond' of this book is available open access under a CC BY 4.0 license at link.springer.com

Inhaltsverzeichnis

Frontmatter

Introduction

Frontmatter

Open Access

Digitalisation and Development: Issues for India and Beyond

Abstract

Information and communication technologies (ICTs) provide new opportunities and new challenges for developing economies. ICT adoption, digitalization and automation provide formidable new opportunities in terms of increased efficiency and productivity, the creation of new services and occupations and increased connectivity among agents. However, the extent to which developing economies are able to reap these potential benefits is contingent on a set of other social, economic and institutional dimensions. While economic growth and rising productivity are the major expected outcomes of digitalization, digital divides and related forms of exclusion and inequalities are commonly observed too. India, one of the largest economies in the world, with a remarkable pace of ICT diffusion, represents a relevant case to investigate the impacts of digitalization on economic development. The present book collects a series of novel contributions on this theme, studying the Indian experience in an international cross-country perspective. This introductory chapter presents background information on the Indian case, introduces the main themes on the relationships between ICTs, socio-economic development and digital divides and provides a summary and road map to the chapters included in the book. On the whole, the main message of this book is that the impact of ICTs is contingent upon other assets, capabilities and institutional conditions. National policies should therefore not only promote digitalization as such but also ensure its co-evolution and complementarity with a variety of other country-specific factors.

Dibyendu Maiti, Fulvio Castellacci, Arne Melchior

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ICT, Growth and Happiness

Abstract

This chapter reviews two strands of literature. The first is on Information and Communication Technology (ICT) and growth. The increasing role of ICTs came together with stagnating growth rates in many countries. This has been denoted the Solow paradox. During the dot-com era from the mid-1990s, many believed that the paradox was solved. Growth rates increased, and the Internet became pervasive. The great recession has been followed by lower growth in Europe and the USA and a return of the Solow paradox. Evidence indicates that the share of Internet users in countries' populations had a positive effect on growth in the 1990s, but that this effect vanished for developed countries after 2000. The second strand of literature is a heterogeneous research tradition that relates ICT not to income and growth, but to human well-being. That literature indicates positive (as well as some negative) effects of ICT and the Internet on people's happiness. Some new evidence indicates that the share of Internet users in populations in a panel of countries is positively related to average happiness.

Per Botolf Maurseth

ICTs and Economic Performance

Frontmatter

ICT Investment and Economic Growth in India: An Industry Perspective

Abstract

The role of information and communication technologies (ICT) in driving economic growth has been well-established in the literature. By reducing communication and transaction costs, and improving the quality of capital, ICT helps firms improve their productivity and growth. Given her linguistic and engineering skills, India has been pioneering in ICT exports, in particular, the export of software services since the 1990s. However, there is hardly any attempt to understand how Indian industries have been taking advantage of the massive growth potential of ICT use in their production process, looking into the experiences of different industries. This has been primarily constrained by lack of adequate, disaggregated data on the ICT use by industries. While a few studies have attempted to understand the contribution of ICT to aggregate economic growth, the role of ICT at a detailed industry level is hardly studied in India. This paper is a first attempt to construct ICT investment series for the registered or organised segment of manufacturing industries in India, and one of the first few attempts that have made so far to build such ICT series for the aggregate Indian economy. The study extends the capital asset database in India KLEMS to include ICT investment, i.e. investment in hardware, software and communication equipment, in respect of different manufacturing industries. The paper also provides preliminary estimates of the contribution of ICT capital to growth in the aggregate economy and registered manufacturing sector.

Abdul A. Erumban, Deb Kusum Das

Technological Disruptions and the Indian IT Industry: Employment Concerns and Beyond

Abstract

Internet of Things (IoT) industry is one of the most dynamic sectors in India. This US$ 150 billion-strong industry employs 3.8 million people and contributes more than 9% to Indian GDP. However, this largest private-sector employer has been experiencing stress due to fast-changing business models, increased competition from other countries, restrictive visa policies, upsurge in anti-outsourcing sentiments and, most importantly, technological disruptions. These disruptive technologies—captured in a moment in the history of technological transformations as the Fourth Industrial Revolution or Industrie 4.0—principally include such developments as cloud computing, big data and analytics, Internet of Things (IoTs), automation, robotics and blockchain. While Industrie 4.0 has rendered conventional engineering expertise and low-end IT services redundant, it has the potential of creating new employment opportunities in a host of sectors including administration, banks, retail trade and online marketing. Disruptive technologies have a strong chance of transforming the nature and composition of the Indian IT industry in a big way, including endangering India’s position as the software superpower in the world. Albeit, the Indian IT industry has historically proved itself to be extraordinarily resilient and fortified during turbulent shocks of the dotcom bubble, the sub-prime crisis and US visa restrictions. Based on secondary data, this paper aims at mapping the changing nature and composition of the Indian IT industry during recent years. It tries to identify contemporary challenges to employment and business opportunities in the Indian IT industry. The paper includes policy suggestions for enhancement of relevant technological and skill capabilities in the country.

Hastimal Sagara, Keshab Das

IT Enabling Indian Firms: The Importance of IT Outsourcing Companies

Abstract

The literature on the role of information technology outsourcing (ITO) only rarely considers purchasers in developing countries. This is an important omission and even more so in India, which has an IT outsourcing industry that is well placed to bring world-class applications of the technology to domestic firms. This chapter assesses the sector’s role in India using evidence from econometric analysis covering 10,100 firms over 5 years as well as qualitative responses from 29 in-depth interviews. The econometrics shows that there is a strong positive impact of IT outsourcing on output and productivity, and that the effect is bigger than that achieved by buying hardware and software alone. Comparing with studies from around the world also reveals that the effect of ITO in India is typically larger than firms in developed countries achieve with investments into IT—so that ITO facilitates catching up. The qualitative evidence helps to understand why these strong effects occur. It suggests that ITO companies are engaging in a conscious process of learning in both developed markets and India, and that in doing so, they bring innovations to India and assist in adapting them to the local context.

Grace Kite

ICT, Access to Finance and Firm Exports: A Cross-Country Study

Abstract

The present study tries to empirically evaluate how information and communication technology (ICT) and access to finance separately and jointly affect the firm export decision. The study uses data from the World Bank Enterprise Survey for two different waves. Empirical results based on the probit model suggest that ICT and access to finance plays an instrumental role in the firm export decision. Although the interaction of ICT and access to finance is insignificant, the indirect effect of ICT on the firm export decision through access to finance still cannot be ruled out as ICT is one of the significant explanatory variables in the simultaneous equation with access to finance as the dependent variable. The direct effect of ICT reduces cost and hence increases the likelihood of export decision. Indirectly, ICT affects export decision through its effect on access to finance and export decision.

Prakash Singh, Dibyendu Maiti

Time Zone Differences and Service Trade

Abstract

The paper explains how service trade has been facilitated because of the availability and development of Information and Communication Technology (ICT). With this, the paper points to the emerging theory of time zone (TZ) differences and trade where time zone difference between two countries evokes service trade given the availability of ICT. A simple 2 × 2 general equilibrium framework is considered to explain the effect of trade across non-overlapping time zones on factor prices and output. Results show a rise in the wage of skilled labour and a fall in rent. The result is conditional on the assumptions of factor intensity. In the case of output, the sector exploiting the time zone difference is seen to expand while the other contracts. This outcome, however, is independent of the assumption of factor intensity.

Biswajit Mandal, Alaka Shree Prasad

Towards One Agricultural Market in India: Does the ICT Help?

Abstract

The current phase of economic reforms in agriculture is oriented to help farmers reach out to a larger all India market in order to fetch the best prices and earn higher incomes. The government has already been relaxing regulations to clean the market of imperfections and improve its efficiency, but moving towards ‘one’ Indian market has become a more targeted objective of reforms. The paper reviews the fast-changing scenario of institutional reforms and application of ICT as a facilitator of reforms. Empirical analysis with data on pulses reveals a convergence of prices in states towards a national-level price enabled by information flow from major markets but cannot confirm the role of trade in equalizing prices nor the benefit of higher prices reaching the producers. This transition period still shows signs of selective market integration and asymmetrical market responses mostly observed in consuming states.

Nilabja Ghosh, Mayanglambam Rajeshwor, Parmeet Kumar Vinit

Digital Divide and Inequalities

Frontmatter

Digital Divide: How India and China Stack Up

Abstract

India and China are emerging technological powers and are becoming increasingly important players on the global stage in terms of their gross domestic product (GDP) growth and their share in the world economy. This chapter provides a descriptive empirical analysis for country-level comparison of major economic and information and communication technology (ICT) indicators. The ICT diffusion index (ICTDI) has been constructed to identify within-country inequalities in terms of the digital divide across Indian states and Chinese provinces. The descriptive analysis indicates that India is far behind China on fronts like the maturity of the Internet ecosystem, ICT foundations, ease of Internet entrepreneurship, and ICT health. But Internet growth in India has been around three times more than China between the years 2000 and 2017. The constructed ICTDI indicates that Indian states such as Kerala, Maharashtra, Karnataka and Tamil Nadu are more digitalised than Bihar, Chhattisgarh and Madhya Pradesh. In China, the East region is dominant as Beijing, Tianjin, Shanghai and Guangdong show higher ICT diffusion.

Nidhi Tewathia

Is India Digitally Divided? Identifying the Determinants of ICT Diffusion at the Household Level

Abstract

This paper shows that poor digital connectivity undermines the socio-economic development in rural India and finds out various socio-economic factors responsible for the wide difference in ICT diffusion, using household-level nationally representative database of NFHS (National Family Health Survey)-III round (2005–6), NFHS-IV (2015–16) round and DLHS (District Level Household Survey) 2007–8. The probit regression with marginal effect and reference category methods are applied to derive the socio-economic factors explaining the ICT diffusion. A pooled probit regression method is further applied to check the robustness of the results. The results suggest that the gap in access to ICTs between rural and urban areas has been widened during the period from 2007 to 2016. The access to ICT innovations and the levels of socio-economic development have been found highly correlated with the extent of the digital divide in India. More emphasis should be given on human development (like education, health), income generation schemes in rural areas, improvement of infrastructural facilities, strategies to narrow down the information gaps and other social barriers will improve the access to the ICTs.

Pratap C. Mohanty

Effect of ICT on the Performance of Indian States in Terms of Human Development Indices

Abstract

The differences among the states in terms of Human Development Index (HDI) can be an outcome of the performance of the regional governments. The components of HDI can be taken as services produced by the state governments while some variables like tax collection of states, population, etc. can be considered as inputs of the states. The differences in the capacity of states in the utilization of grants and revenue of the states are important determinants in explaining the disparities among the states. The objective of the central government is to go for balanced development of different regions. The ICT is expected to improve social indicators like performances in health, education, etc., by effective utilization of social expenditure by states, and can potentially reduce the regional disparity in India. Identifying some services as output produced by some inputs in the different state governments in India, we rank the states according to their performances using Data Envelope Analysis (DEA). We have further estimated the target output that a state government should emphasize for its overall development. We have identified that the ICT, defined as a composite of teledensity, internet and mobile use, has been a responsible factor for the variation of performance of the state governments in terms of improvement of social indicators.

Chiranjib Neogi

ICT Users and Socio-Economic Effects

Frontmatter

ICTs and Effectiveness of Governance: A Cross-Country Study

Abstract

This paper investigates the impact of innovations in ICTs on the effectiveness of governance using cross-country unbalanced panel data for the period from 1996 to 2017. With the ability of information storing, sharing and automation, ICT innovation can improve governance by enriching the governmental information infrastructure, presenting opportunities for better decision-making, encouraging pro-active government-citizen interaction and increasing public accountability. At the same time, the increasing trend of the digital divide, cyber-crime, loss of privacy, unemployment and inequality put pressure on the ability of a state to govern effectively. The resultant effect of ICTs on the effectiveness of governance depends on the relative strength of the two forces. We find that improvement in ICT leads to a rise in the effectiveness of governance and control corruptions subject to the efficacy of the judicial system and the rule of law, and the presence of a better rule of law strengthens the favourable impact of ICT on governance.

Anubha Agarwal, Dibyendu Maiti

Red Tape, Corruption and ICT

Abstract

This chapter focuses on that aspect of ICT which reduces the length of red tape and analyses the desirability of introduction of ICT from the stakeholders’ perspective. In a theoretical model, we show that the support for such a reform depends on the stakeholders’ profile, the nature of the public good/service and the initial length of red tape. The implementation of ICT in delivery of public goods/services may create demand for an honest regime. However, paradoxically, the support for ICT reform is expected to be lower in countries marred with long red tape and entrenched corruption. The chapter also provides empirical support for the theoretical results.

Poulomi Bhattacharya, Vivekananda Mukherjee

Role of Technology in Governance and Development: The Case of e-Uparjan in Madhya Pradesh

Abstract

This study explored the interlinkages between the attributes of technology, governance and development. The e-Uparjan is a case of digital inclusion and synchronisation of activities of stakeholders like farmers, designate procurement agencies, technology providers, financial institutions and state administrative agencies. A single case study approach is adopted to understand the technology-enabled procurement system at the micro-level. Field observations expanded the scope of understanding of the context and potential implications of the procurement system to associated stakeholders. The study conjectures that faster and real-time information flow along with the decision nodes can plug in fund leakage, reduce transaction costs and mitigate rent-seeking behaviour of actors along the value chain. It is proposed that the improvisation with a low-cost information and communication technology (ICT) can have potential to streamline procurement operations and secure farmers’ pay-off in a time-bound manner through direct benefit transfer under the price support scheme. The e-Uparjan appears to have improved operational efficiency of collection, warehousing and optimising transportation network for food grains procurement and distribution. The e-Uparjan offers fresh insights on social policy making as network processes that requires an adequate understanding of social realities, seamless synchronisation of involved stakeholders and aspects of public procurement policies.

Satyendra Nath Mishra, Kushankur Dey

ICT, Gender, and the Labor Market: A Cross-Country Analysis

Abstract

Information and communication technologies (ICTs) have changed societies all over the world through the way we interact and the way we live. By increasing efficiency and information, lowering transaction costs and creating jobs, ICTs have also changed the way we work. ICTs are presumed to especially beneficial for women, who traditionally have been limited from working by time and mobility constraints. Previous studies have been conducted on a microlevel, but few attempts have been made to systematically investigate the relationship between ICTs, female employment and development on the macrolevel. This chapter investigates whether ICTs have an impact on gender equality in the labor market and are among the first to investigate the global trends. Using panel data analysis for 156 countries from the period 1991–2014, this chapter argues that ICTs contribute positively to narrowing the gender gap in labor market participation, mainly due to increased female labor force participation. However, the impact is lower in developing countries, suggesting that ICT is not necessarily a leapfrogging strategy, many are hoping for in terms of female labor force participation and a more gender-equal labor market.

Sigrid Valberg

ICT Exposure and Its Relationship with Academic Self-efficacy and Achievement of Adolescent Students: The Field-Level Study in India and Fiji

Abstract

Today, children and adolescents are more interested in spending time on ICT applications such as playing video games, using mobile, computer and Internet, and watching TV by sacrificing learning and extracurricular activity. The present study investigates whether time devoted to ICT applications adversely affects academic self-efficacy and achievement of adolescent students in two developing countries, India and Fiji. The study developed a structured questionnaire to capture the proposed variables such as level (time spent) of ICT exposure, academic self-efficacy and achievement into a quantitative framework. A survey collected relevant information for these variables from 873 adolescent students of the tenth class standard from 16 schools selected in rural and urban areas in India and Fiji. Cronbach’s alpha test was used to assess the reliability of the instrument before principal component analysis (PCA) was employed to construct a suitable index of academic self-efficacy. Statistical analyses such as ANOVA and regression methods were followed to establish various relationships among the variables. The results suggested that ICT exposure improves academic self-efficacy and achievement of adolescent students, but at a low rate and up to a certain limit of time (3 h/day) spending.

Susmita Mandal

Backmatter

Titel: Digitalisation and Development
herausgegeben von: Dibyendu Maiti
Dr. Fulvio Castellacci
Arne Melchior
Verlag: Springer Singapore
Electronic ISBN: 978-981-13-9996-1
Print ISBN: 978-981-13-9995-4
DOI: https://doi.org/10.1007/978-981-13-9996-1