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The danger with making any term a catchphrase is that you will suddenly find a whole lot of people and organisations talking about it, until one wise person takes a step back and asks everyone: “What are we really talking about?”
At Blackbox, we felt it’s imperative to get the basics out of the way before doing a deep dive into the topic of digital government and governance. So, what is it? In a nutshell, the term refers to how governments incorporate both data and technology to deliver public services in a timely and efficient manner without the need for in-person interactions. This term is often used interchangeably with e-government, but they are markedly different. The Organisation for Economic Cooperation and Development (OECD) makes the distinction clear: “E-government is where technology is used to improve on existing processes while digital government is where services are imagined and delivered in innovative, new ways and facilitated by modern technology.”
While digital governance seems like something that has existed for a while, and indeed, it has—the COVID-19 pandemic made governments change their approach of offering digital services from nice-to-offer to must-offer. In the latter is where many struggled, as there was no luxury of time to scale up and decisions needed to be implemented quickly. The sluggish approach that hitherto existed could no longer be sustained.
To be fair, while the pandemic did jolt many out of a digital slumber, most governments today are doing a remarkable job in building their digital capabilities.
How countries are rising to the occasion
When it comes to enhancing one’s digital infrastructure, countries around the world are adopting a simple, two-pronged approach: Invest and invest big.
Singapore, Malaysia, and Indonesia
Singapore’s investment in the pandemic year itself (2020) increased 30% compared to pre-pandemic 2019. Singapore’ RIE (Research, Innovation and Enterprise) 2025 plan sets aside around 25 billion dollars and among other components includes dedicated investment in Smart Nation and Digital Economy (SNDE). The purpose of this, in the words of the government is “to develop technology leadership to drive our Smart Nation ambition, and anchor Singapore’s position as a trusted digital innovation hub”.
Singapore’s digital journey in fact has been much-talked about and we cover it in detail in our article, Digital Governance: Singapore leads the way. During the pandemic, issues such as a digital divide were brought to the forefront and the need for designing digital experiences that work for everyone. You can read about our perspective on both these topics here and here.
Neighbouring Malaysia’s Federal 2021 budget allocated USD 242.5 million for cybersecurity, Internet of Things and connectivity, digital workforce, and digital transformation of small and medium enterprises. The Malaysian Government’s Digital Economy Blueprint is a 10-year plan that includes 22 strategies, 48 national initiatives, and 28 sectoral initiatives. All these come under the umbrella of six key strategic areas that include driving digital transformation in the public sector; boosting economic competitiveness through digitalisation; creating and enabling digital infrastructure; attracting agile and competent digital talent; creating an inclusive digital society; and building a trusted, secure, and ethical digital environment.
Indonesia, however, surpasses all other regions in Southeast Asia in terms of digital investment and the digital economy in the country is predicted to be the largest at around 1,700 trillion Rp. The COVID-19 pandemic has directly contributed to this growth, with the number of digital consumers from 2020 to mid-2021 increasing by a whopping 21 million. This, in turn, has increased digital transactions by 49% (47 billion USD). While the positives are aplenty, Indonesian Vice-President Ma’ruf Amin did acknowledge that the government needs to do more for guarding against the ‘negative’ aspects of the digital economy such as capital outflow, tax ignorance, and unemployment. This perhaps holds true for all countries on a digital-first trajectory.
China
For a country that stores one-fifth of the world’s data, digitalisation is simply synonymous with its growth. With all the talk of data being the ‘new oil’ of the world economy, China’s share in this is likely to keep increasing. This has been made possible with the country’s relentless efforts towards digitalising all services. Even amid the pandemic and global economic downturn, China’s digital economy sustained a high growth rate of 9.7 percent in 2020, according to a white paper released by the China Academy of Information and Communications Technology (CAICT).
The strength of its internet platforms and size of its domestic data pool are key to its IT position today. In fact, e-commerce itself is playing a major role in revitalising Chinese Rural villages, evident in the success story of Taobao Villages. Digital economy prominently features in China’s 14th Five-Year Plan (2021-2025), with a focus on ensuring that it is in ‘full expansion mode’ by 2025, with “the added value of core industries in the digital economy accounting for 10 percent of GDP”. The efforts will be directed towards accelerating the construction of the information network infrastructure, and a national-level integrated big data center system coordinating computing power, algorithms, data, and application resources. Overall, China’s Big Data industry is estimated to exceed USD 471 billion by 2025. Significantly, the country has fast tracked its ‘5G plus industrial internet’ plans. As of December 2021, a 100 plus industrial internet platforms have been built and over 1800 5G plus industrial internet projects are underway. The industrial internet of things (IIoT), more colloquially known as simply industrial internet, is “the use of smart sensors and actuators to enhance manufacturing and industrial processes. It uses the power of smart machines and real-time analytics to take advantage of the data that “dumb machines” have produced in industrial settings for years” (Posey et al., 2022).
India
India’s response to the pandemic, aided in-part by its CoWIN app, received universal praise and a mention by the UNDP too. The app is essentially a cloud-based system that enables users to book appointments at their preferred centres for vaccination based on location, availability, and type of vaccine, and issues digital vaccination certificates with QR codes for easy access and download at any time—no hassle of misplacing it and applying for another one etc. The groundwork for such a system was in fact laid 6 years ago, when the Ministry of Health and Family Welfare began digitizing the vaccine-supply-chain network through mobile technology. This platform is known as The Electronic Vaccine Intelligence Network (eVIN) and you can read about its achievements in-depth here.
It is worth noting that since the early days of the pandemic, India has provided 5 billion USD cash benefits to its most vulnerable citizens solely through digital payments. This was only possible since the country was already on a digital-first path, and experiences one of the largest volumes of digital transactions globally. This enabled the accelerated adoption of contactless digital technologies.
Japan
Japan unveiled its ‘New Digital Agency’ in September 2021, which aims to serve as the control tower of the country’s digital transformation, including a one-stop point for the government’s online administrative services. During COVID-19, the government faced some criticism for the complicated and sluggish manner which applications for cash benefits were processed. The mission of this agency is to solve these issues through the digitalisation of public administrative procedures and promoting the standardisation and co-ordination of data systems.
ZAMMA Toshiyuki, Head of International Strategy at this agency, affirms “Japan is far from lagging behind other nations in information technology since it is equipped with the necessary infrastructure for nationwide communication. However, the story changes when it comes to optimizing ‘digitalization’ in such a way as to provide good administrative services by the government, which often involves joint efforts with the private sector. Even when individual systems are competent, they will not be user-friendly unless they are properly linked, and it is also important to coordinate with private services that are used on a day-to-day basis. The Digital Agency will play a critical role in overcoming these issues.”
South Korea
In South Korea, the government is setting aside KRW 58.2 trillion in its efforts toward upgrading public infrastructure and ensuring quicker adoption of data and Artificial Intelligence (AI) across its economy. Moreover, The Korea Digital Development initiative (KoDi) was launched in July 2021 by the World Bank’s Digital Development Global Practice. This three-year initiative has been created for the purpose of assisting low and middle-income countries to accelerate digital transformation, with a special focus on strengthening digital trust and reinforcing the role of digital in addressing climate change issues.
Australia and New Zealand
Australia, too, has a comprehensive digital business plan of investing AUD 800 million for the development of whole-of-government capabilities such as digital identity, e-invoicing, and creating a single source of business data. Neighbouring
New Zealand too has earmarked NZD 20 million as part of its Small Business Initiative for new training and tools towards digital commerce. A recent report suggests that NZ businesses moved 40 times faster in digital transformation than they thought possible when Covid-19 struck. The findings further suggest that a mere 205 increase in cloud computing by small/medium businesses will lead to an increased GDP in the range of NZD 3.5 billion to 6.2 billion.
Europe and The United Kingdom
In Spain, as part of the Digital Spain Plan 2025, an amount of 140 billion Euros of public and private investment is estimated to be utilised for digitalisation within a period spanning five years—2020 to 2025. This investment makes sense in the context of a 2020 EIB (European Investment Bank) report that shows EU firms are lagging behind in adopting digital technologies, especially in the construction sector and for Internet of Things (IoT) technologies. The United Kingdom has earmarked GBP 600 million for upgrading the government’s IT capabilities for improving security, efficiency, and administration while France is investing USD 8.4 billion in digital transformation, infrastructure, and start-up investment.
The Middle East
The investment, however, is not limited to the public sector as seen in Saudi Arabia’s Universal Service Fund, which has investment of SAR 9 billion from the government and SAR 6 billion from leading telecom companies too. The purpose of this fund is improving digital infrastructure and connectivity to remote areas.
The Egyptian government launched a ‘Digital Egypt’ project and dedicated 12.7 billion Egyptian pounds during the 2020 to 2021 fiscal year to support digital transformation. As part of the broader plan of Egypt Vision 2030, government buildings across the nation (32,500 of them) will be connected within the fiber optic network. The aim of this is ensure speedier communication and better service. The same high-speed internet is being replicated for schools and villages as well. The investments are likely to pay off, with the World Bank opining “The adoption of digital technologies in MENA (Middle East/North Africa) countries would achieve enormous social and economic benefits amounting to hundreds of billions of dollars annually, and the extensive use of digital services, such as mobile services and digital payments, would boost economic growth.”
The future is digital, but what more can be done?
Investment is the first and crucial step, but ensuring that the digital journey takes all citizens along must be a priority too. This is the first among our series of articles on digitalisation, and we will be covering all aspects of it in the coming days—from what can be done to bridge the widening digital gap to ensuring the creation of digital experiences that are designed keeping everyone in mind. Watch this space for more.
If you would like to understand how Blackbox can help your organisation in identifying opportunities to be better ready for the next wave of digitalisation, connect with us on connect@blackbox.com.sg
Author: Blackbox Research Team
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