Mbillionth Award for Mobile Innovations in South Asia, DEF

Mobiles currently provide more than 600 million points of connectivity in India, through which information and opportunity flows. Citizens with access to telecommunications can tap into the benefits of broad economic and social growth much more easily than those who are unconnected. This result is all the more important for two reasons, one internal and one external. The first is that India is at a stage in its development when there is a large-scale movement of the population from the countryside to the towns, posing new challenges for both rural and urban economies. The second is that the global economic environment has become harsher, and it will be essential to take advantages of all possible opportunities to sustain growth.

Of course, access to mobile telecommunications is certainly not the only thing that matters to economic growth. On the contrary, academic research has shown the vital importance of complementary skills and other infrastructure. Unless they are in place, the full potential of better access to telecommunications will not be realized. There is no benefit in farmers knowing the prices that their produce could be sold for in different markets if the roads are too poor for them to be able to transport the goods to those other markets. Improving productivity and rural incomes requires an array of enablers in the economic cycle, which runs from planting to the final sale of produce; access to information is just one such enabler.

Equally, there is no value in mobiles offering SMEs the potential to introduce different business models which would deliver greater efficiency unless the entrepreneurs and their workforce have the basic literacy skills to use the technology appropriately. Evidence shows that entrepreneurs using mobiles can exploit the potential for improved productivity, incomes and employment. Telecommunications cannot be seen in isolation from other parts of the development process.

While some parts of India are clearly enjoying the benefits of new found access to telecommunications, other parts are still lagging behind. Clearly there is need to invest in other, complementary, infrastructure, so that the impact of the interaction between telecommunications and other infrastructure can be significantly enhanced. Mobile telephony has an important role to play because it provides a means of the exchange of information and learning, but it is only one element in the process of productivity growth. For example, 52% of the working population in India is engaged in agriculture and the barriers to raising agricultural productivity gains go far beyond communications access.

Therefore, access to telecommunications needs to be seen as a foundation on which other initiatives can be built. The current Indian regulatory environment has stimulated investment in communications on an unprecedented level. However, the focus on voice connectivity led to high speed data connectivity to be neglected. High-speed data services and the internet are seen as a critical capability that will drive future global competitiveness in technology and services. This debate has begun in India and it is a positive sign. Weaknesses in physical infrastructure will constrain the potential productivity and growth benefits of access to communications unless systematic and integrated set of development policies are put in place to ensure that the benefits of growth are more widely shared as the economy grows.

Rajat Kathuria is Professor with ICRIER (Indian Council for Research on International Economic Relations). He can be reached at rajatkathuria@gmail.com