Context: With the rapid pace of technology blurring boundaries, a holistic policy framework is must.
How is Data a new currency?
- Paradigm shift: The amount of “value add” from intangible technology services as opposed to physical objects, even in traditional goods, is being transformed by information.
- A modern automobile has 40% of its component value from electronic-based products and a modern electric vehicle has close to 100 million lines of code, which is more than that used by a Boeing 787 or the Chrome browser.
- Increasing digitisation: There is increasing digitisation and electronification of industrial activities, products and services, influencing the evolving skill sets in industry.
- For instance, a conventional “metal-based” industrial product, information and electronics are becoming all-pervasive, ensuring that we set boundaries to control quality or the uptime of the equipment.
- Revolution: This revolution is taking place across products, as information availability drives efficiency and creates value for customers by providing greater control over the product and its surrounding environment.
Why is there a need of a new policy framework?
- To address the needs of various stakeholders: governments have tended to build specialised departments and designed policies that govern those areas.
- Over time, as each of these departments grew, they have tended to operate in silos. This has for most of the 20th century been reasonably successful in driving economic development in countries.
- Capital formation: Technology is driving an increasing share of the value add coming from digitisation and data analytics in products and services across industry segments, there needs to be a way of encouraging capital formation by way of intangibles in traditionally tangible industries.
- Issue of a shift of value between manufacturing and services as technology changes: The policy, promotes and gives incentives for manufacturing, whereas the share of intangibles, even in traditional manufacturing companies, whether it be software, research and development or even servicing of products, are not adequately covered in industrial policies.
- Inter-departmental cooperation: There is increasingly a need for inter-departmental cooperation and synergy not only in policy framework but also in deployment.
- Increasing electronification and digitisation of the automobile are not covered by industrial policies that govern the Electronics and Information Technology Ministry.
- Drones that could serve different sectors, including agriculture, and would require a lot of inter-departmental clearances outside of the Department of Agriculture.
- Holistic view: There is a need to have a holistic view of policies for economic development as technology is becoming a significant enabler in most industries.
- A sufficiently empowered policy clearing cell: It could ensure a holistic view on policy across departments of government, at the State and the Centre.
- Ecosphere: A nourishing ecosystem for industry, including the hard infrastructure and softer areas such as education, skilling, technical institutions, laboratories, testing centres, etc., has to be cultivated.
- The creation of clusters of companies in adjacent but complementary areas could constitute such an ecosystem that encourages multi and cross-disciplinary learning and spur innovation and economic development.
- In this evolving policy framework, it is important that there is close cooperation and alignment between the Centre and State to ensure effective implementation on the ground. Some of these thoughts could help us navigate through an ecosystem that is changing with technology.