Digital Value Hunt
By: Amit Bhushan Date: 12th Nov. 2015
The growth in digital economy is raising expectations from a lot of quarters in emerging economies. It's most prominent feature to ordinary seems to be rise of e-commerce which is ubiquitous. The ability to curtail costs such one for 'search' or 'price hunt' as well as of 'managing inventory' provides a ready 'use case' for such systems to be in play. Branding is often cited as sustainable differentiator over a period and is relied upon by the 'value investors'. Such 'value deals' then become the talking point for media and a basis for mass frenzy, which crash at some point. However there is a quite movement taking shape in the form of rise of e-governance which is about transforming government services delivery.
This can be from Passport to e-Visa to Tax collection, bills collection or about process redefinition and streamlining consumer and industrial licenses such as driver's licenses to opening a food outlet or a small manufacturing unit and so on. Some others like improvement in educational institutes' management on the back of specific ERP or digital tools, improvement in primary health care by deploying tools etc. are seen as segregate from this overall trend but most of these also rely on the same set of tools and address the same emerging consumer's demand.
The rise of digital banking or payments by Fintech is a part of the rising digital tools trend that tends to improve the living standards. This is what has been driving transformations across much of developed world and is now hitting 'change' in much of emerging world.While the markets are focussed to the entities who focus towards redefinition of consumer-supplier interaction using internet as tool, relying mainly on growth of 'traffic' related data and then tracking the trend, however most other segments related to improvement in services like schooling or e-governance are being missed out.
This is even as most such companies operate in the enterprise software segment though their output may not be in form of growing list of direct consumers on a web-portal, but deployment of software at multiple government or independent entities who in turn interact with their specific target consumers may be through web or off-line. In fact such enterprise software if sold through cloud through a revenue sharing model, has the same impact as web portal although may have an additional benefit of having a ready clientele of the target institution.
However most government or similar institutions have still not taken to practice, a software product and rely mostly on costly custom software, even with issues such as cost or availability of skilled resources; rather than considering products where there is similarity of experience to end consumers to be delivered. We will off course have issues such as languages, cultural motifs, variations in consumer preferences and leadership choices basis their public commitments, which will need to be tackled for such 'products'.
There is growing appreciation for the need to resurrect a digital rise across most of the emerging economies especially from Cambodia to Morocco who are witness to falling growth rates on the back of diminishing commodity prices and shrinking exports. This is even as their fetish for better infrastructure for telephony or roads, ports and airports is just on the start. Earlier it was being financed from exports and much of the development was being imported, however now such infra needs to be financed domestically from taxes or user charges and growth of new services provides a good base. This would also support their domestic engineering companies play a larger role in development of domestic infrastructure, subject to capabilities as well as ability to execute a suitable model where PPP (Public Private Partnership) may off course have a large role.
This would than pave way for growth of local jobs and demand for trade basis local needs & competencies including local corporate interests. Globalization in any case has been on retreat lately and this has been basis local demand for customization or locally manufactured products/services or had a financial basis rather than political basis. Even when the wind reverses its direction, the chances for service sector localization being affected will be tiny as compared to manufacturing, because of capabilities as well as cost and time issues.
The role of international banks and consultancies will change to validating the business finance models, the financial projections and mix-match competencies for Joint Ventures, technology adoption etc., advisory on legal systems and statues, dispute negotiations/arbitration etc. Off course not all infra or all emerging economies be built basis such model, however quite a few larger economies might be in need of working on a few suitable models for different sectors/reasons, rather than rely on just a few sectors to propel their economies and wait for the pall of gloom to lift off those sectors whenever their some international headwinds.
By: Amit Bhushan Date: 12th Nov. 2015
The growth in digital economy is raising expectations from a lot of quarters in emerging economies. It's most prominent feature to ordinary seems to be rise of e-commerce which is ubiquitous. The ability to curtail costs such one for 'search' or 'price hunt' as well as of 'managing inventory' provides a ready 'use case' for such systems to be in play. Branding is often cited as sustainable differentiator over a period and is relied upon by the 'value investors'. Such 'value deals' then become the talking point for media and a basis for mass frenzy, which crash at some point. However there is a quite movement taking shape in the form of rise of e-governance which is about transforming government services delivery.
This can be from Passport to e-Visa to Tax collection, bills collection or about process redefinition and streamlining consumer and industrial licenses such as driver's licenses to opening a food outlet or a small manufacturing unit and so on. Some others like improvement in educational institutes' management on the back of specific ERP or digital tools, improvement in primary health care by deploying tools etc. are seen as segregate from this overall trend but most of these also rely on the same set of tools and address the same emerging consumer's demand.
The rise of digital banking or payments by Fintech is a part of the rising digital tools trend that tends to improve the living standards. This is what has been driving transformations across much of developed world and is now hitting 'change' in much of emerging world.While the markets are focussed to the entities who focus towards redefinition of consumer-supplier interaction using internet as tool, relying mainly on growth of 'traffic' related data and then tracking the trend, however most other segments related to improvement in services like schooling or e-governance are being missed out.
This is even as most such companies operate in the enterprise software segment though their output may not be in form of growing list of direct consumers on a web-portal, but deployment of software at multiple government or independent entities who in turn interact with their specific target consumers may be through web or off-line. In fact such enterprise software if sold through cloud through a revenue sharing model, has the same impact as web portal although may have an additional benefit of having a ready clientele of the target institution.
However most government or similar institutions have still not taken to practice, a software product and rely mostly on costly custom software, even with issues such as cost or availability of skilled resources; rather than considering products where there is similarity of experience to end consumers to be delivered. We will off course have issues such as languages, cultural motifs, variations in consumer preferences and leadership choices basis their public commitments, which will need to be tackled for such 'products'.
There is growing appreciation for the need to resurrect a digital rise across most of the emerging economies especially from Cambodia to Morocco who are witness to falling growth rates on the back of diminishing commodity prices and shrinking exports. This is even as their fetish for better infrastructure for telephony or roads, ports and airports is just on the start. Earlier it was being financed from exports and much of the development was being imported, however now such infra needs to be financed domestically from taxes or user charges and growth of new services provides a good base. This would also support their domestic engineering companies play a larger role in development of domestic infrastructure, subject to capabilities as well as ability to execute a suitable model where PPP (Public Private Partnership) may off course have a large role.
This would than pave way for growth of local jobs and demand for trade basis local needs & competencies including local corporate interests. Globalization in any case has been on retreat lately and this has been basis local demand for customization or locally manufactured products/services or had a financial basis rather than political basis. Even when the wind reverses its direction, the chances for service sector localization being affected will be tiny as compared to manufacturing, because of capabilities as well as cost and time issues.
The role of international banks and consultancies will change to validating the business finance models, the financial projections and mix-match competencies for Joint Ventures, technology adoption etc., advisory on legal systems and statues, dispute negotiations/arbitration etc. Off course not all infra or all emerging economies be built basis such model, however quite a few larger economies might be in need of working on a few suitable models for different sectors/reasons, rather than rely on just a few sectors to propel their economies and wait for the pall of gloom to lift off those sectors whenever their some international headwinds.