India will lead the post-Covid digital world

The pandemic has profoundly impacted the way human beings interact with each other, and this has far-reaching implications for organisations and economies. Some of these shifts have created long-term opportunities, and there are four important developments that could play to India’s advantage.

On the demand side, there has been a quantum shift, with consumers going digital at an unprecedented pace. Around 12-13 per cent of the global gross domestic product (GDP) is currently consumed digitally, and this is set to grow further. This is an opportunity across sectors for large organisations as well as small businesses, which have tremendous scope to broaden the market with government support. The recent announcement by the Indian government to launch the National Logistics Information Portal is a great move towards digitalising infrastructure.

Large-scale digitisation has enormous implications for a country like India. The distribution paradigm has shifted within the country, but more importantly, India now has an opportunity to lead and plug into the global digital infrastructure. Digital consumption related to block-chain, crypto and metaverse will be one of the most defining aspects of the coming years.

As for the supply side, there are two countervailing forces at play. The supply chain for goods is shifting towards near-shoring and there’s a quest for resiliency. The lack of supply-chain transparency affected businesses the most during the pandemic. While shifts away from China will only be incremental, they represent an opportunity for a larger manufacturing base in India, and recent incentive structures are well-guided.

The supply of manpower, on the other hand, will globalise even more rapidly due to work-from-home. This creates an opportunity for a second round of exponential growth in India’s tech and business process outsourcing industry. Free data flows and systems access will be critical, and Indian regulations will need to evolve to facilitate this.

Then you have environmental, social and corporate governance (ESG), which has got a tremendous fillip of late — ‘E’ because of the need to build resilience against tail events and ‘S’ due to the socio-economic inequities that came to the forefront during the pandemic. Environmental initiatives require good public-private partnerships to succeed. The shift to renewables and a rethinking of production and distribution systems can make a significant difference. It’s also important to ensure there is a “just” transition, in that the brunt of the costs are not borne by the poorer segments of society, or indeed by developing markets.

On the social side, policy frameworks are altering to allow for the creation of a strong social safety net and the use of digital tools for wider reach and impact. It is important to ensure that issues such as poverty, hunger and lack of education are addressed without further exacerbating environmental issues.

India has a meaningful role to play in setting the global rules and agenda to ensure a fair and proportionate transition pathway as well as role-modelling “bottom of the pyramid” policies and solutions. The next two years have the potential to be pivotal.

You also need to have global coordination. The pandemic made it clear that “nobody is safe till everybody is safe”. For the first time in the 70 years since the Bretton Woods agreements, there will have to be a massive rethink on how to create the right institutions to effectively coordinate policies and efforts. Large countries such as India have a real role to play in driving thought leadership, shepherding new discussions and using existing frameworks.

I believe that the next decade can be India’s decade, and that by using these four big shifts, it has the chance to play a very different kind of role as we move forward.  

The writer is chief executive officer and director of DBS Group. This column has been edited for space