Governments Play Catch-up With Digital Economy
Propelled by rapid technological changes and dynamic market forces, the digital economy is changing fast. To be in step, governments and law-making bodies around the world are coming out with policies and regulatory mechanisms. With mobile devices becoming an indispensable part of the millennial society, their transformative powers for almost all sectors cannot be undermined.
Many Asia-Pacific countries, like India, Japan and Vietnam, have showed tremendous will to reconfigure their policies from a structural framework to a more proactive one, especially in the field of technology and manufacturing. The economics of open market operation has made most of these countries realise the power of strengthening local markets in this regard. The approach not only ensures better competitive edge but, in most cases, has also greatly helped in reducing the fiscal deficit of many economies.
India’s recent Production Linked Incentive (PLI) scheme is a perfect example of regulatory development shift for the handset manufacturing industry. The scheme envisages India becoming a global smartphone manufacturing hub by 2025. Further, the government through such a scheme aims to make India a ‘net exporter’ of electronic components from being a ‘net importer’. It lays emphasis on government’s motive to shift from its earlier aspiration of laying a Digital Foundation to creating Digital Value through that foundation. The PLI scheme, which can add up to $55 billion to India’s GDP in the next five years, will greatly spur the country’s electronics industry as it recovers from the supply chain disruptions caused by the COVID-19 pandemic.
Policy Highlights
|
Countries |
Main Initiatives | Goals |
|
India |
Production Linked Incentive Schemes |
To make India a global smartphone manufacturing hub by 2025 |
| Japan | Society 5.0 Mission |
Complete digitisation of Japan into a ‘super smart society 5.0’ |
| Vietnam | National Digital Transformation Program |
To double technology business |
| China | Made in China 2025 |
To position China from being a low-end manufacturer to high-end producer of goods |
Inspired by initiatives like ‘Make in China 2025’, ‘Make in India’ and ‘Make in Japan’, Vietnam came out with its ‘Make in Vietnam’ campaign in June 2020 to attract global technology companies to its ICT industry. Vietnam, which is ranked second in the world for manufacturing office equipment and smartphones, has through policies like the National Digital Transformation Program, E-commerce Master Plan and IT Master Plan has only reiterated its goal of becoming a technological powerhouse. The country aims to develop over 100,000 digital technology companies, which would account for 20% of GDP by 2025, and make the 5G mobile network service universal by 2030.
Japan too is working towards its ‘Society 5.0’ mission by investing in and promoting areas of automotive driving and mobility, manufacturing, robotics, Smart Life and infrastructure safety among others. Under this initiative, it aims to use technology to reinvent its society as a ‘super smart society’. The aim is partly to maintain productivity in an ageing country, which specifically involves the digitalisation of infrastructure, finance, healthcare and logistics. Other initiatives like Connected Clusters, Industrial Cluster Project 2001-2020 and Japan Vision 2050 are policies that would further leverage Japan’s target of achieving complete digitisation.
The launching of ‘Made in China 2025’ policy is yet another way the Chinese seek to grip the global high-tech manufacturing sector. The policy aims to use government subsidies, mobilise state-owned enterprises and pursue intellectual property acquisitions to surpass the global technological prowess in advanced industries. Moreover, such a shift in stance will position China from being a low-end manufacturer to becoming a high-end producer of goods.
Way Forward
With the dynamicity of the evolving technologies and emerging economies throughout the world, the regulatory landscape is fast evolving, especially in the Asia-Pacific region. Governments are looking out for alternative ways to regulate technology and create an environment for innovation and talent.
Competition faced from the tech giants of the United States and China is forcing law-making bodies to rapidly transform their regulatory mechanism. Emerging trends in technology focus on the following to define the future of regulatory direction:
- Improved digital infrastructure.
- Empowering emerging economies with tech innovation.
- Push for privacy and data security.
The next stage of digital revolution surely side-lines the conservative approach of ‘one size fits all’ and compels policymakers to adopt an omni-channel approach for the rapidly transforming technology ecosystem of the world.
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