Digitalisation will provide an unprecedented opportunity: Dr Nanda Kumar
In conversation with Dr Karippur Nanda Kumar, Professor of Information Technology, SP Jain School of Global Management, Singapore on building smart cities and transforming the economy through digitalisation of infrastructure.
What are the main challenges that lie in the way of building smart cities?
The development of smart cities is an integral strategy for many Asian countries such as India to address the challenges of rapid urbanization and population growth.
Firstly the “smartness” required for a city needs to be clearly defined depending on the requirements and characteristics of each city in consultation with key stakeholders. A lot of cities jump into embarking on irrelevant applications without clearly understanding the needs.
Facilitating connected infrastructure and developing innovative services for the city leveraging emerging technologies such as Internet of things(IOT), data analytics, blockchain, artificial intelligence and 5G is absolutely challenging as it requires collaboration across various stakeholders, deep technical skills and a clear revenue model to sustain.
How can we make smart cities more sustainable and eco-friendly?
Smart city applications can definitely address sustainability challenges and help build eco-friendly solutions. Cities could take advantage of smart applications to target traffic congestion, vulnerability to climate change, and natural and man-made disasters with the help of technologies such as IOT, data analytics and artificial intelligence.
Smarter roads can be built where traffic lights are coordinated with the amount of traffic, smarter energy and water distribution can be ensured by measuring the amount of such resources being consumed across the city. Green buildings connected with 5G infrastructure using automation will save energy, bring down carbon emissions, and help fight climate change.
Why do digitalisation projects fail?
In general a successful project is defined as one that is completed on time, within budget, and delivered with all the features and most importantly achieved the outcomes intended else it comes a white elephant. Years of research on digital transformations has shown that the success rate of transformation projects is low with many organizations not achieving clear benefits. Digital transformation is all about innovative integration of digital technologies into all areas of a business, substantially changing how you operate and deliver value to customers.
Given the constantly evolving nature of technology, digital transformation cannot be a one-time investment or project. Some of the challenges that businesses face today include organizational silos, legacy processes and artistic resistance to change. There is a lack of digital leadership and many enterprises are confused about digital transformation with limited understanding of who should lead it, what to do next and how to measure success.
What kinds of challenges do leaders face due to digitalisation?
Successful digital transformation starts from the top management and digital transformation is inherently cross-functional that requires new leadership practices to engage employees and transform the organization.
Many enterprises are still confused about digital transformation and need to have clarity in who should scope it and how to measure success. Leaders have the challenge of co-creating and driving a vision that is clear and meaningful for the organization. It is important for leaders to have the ability to sense environmental changes including potential shifts in technology, competition, and customers, for example in the context of ongoing Covid-19 pandemic.
Leaders today cannot work in isolation and need to proactively connect and collaborate with partners and key stakeholders for innovative digital business ideas and opportunities. Developing digital skills, empowering employees and increasing the trust among each other are critical challenges too.
How can digitalisation completely transform India’s economy?
There is a need to accelerate digital infrastructure rollout which is critical for economic growth, provision of services and job creation in India. With more than half a billion internet subscribers, India is one of the largest and fastest-growing markets for digital consumers, but relinquishment is uneven among businesses. India is ranked only 46th in the IMD’s Digital Competitiveness Rankings, 2021. Over 53 percent of businesses in India are far from realizing their digital transformation goals, according to the results of a study conducted by Forrester Consulting on behalf of Dell 2021.
Nearly every sector of India’s economy will be radically changed with high speed digital infrastructure and accelerated digital transformation. For example it is estimated that digital transformation could drive the manufacturing sector in India on the back of technologies such as cloud computing, AI, robotics, IOT and blockchains and generate up to $1 trillion in economic value from the digital economy by 2025.
Covid-19 forced the closing of 1.5 million schools that impacted 247 million children enrolled in elementary and secondary schools, making online classes the new normal where digital connectivity is critical. Access to quality public healthcare services is a challenge in India with an aging population, uneven geographical distribution and unbalanced supply and demand of medical resources. Rollout of 5G networks in the coming years provide an unprecedented opportunity to healthcare service providers to offer near real-time, high-quality and interactive telemedicine services.
In what ways will this digitalisation affect the MSME sector?
Micro, Small and Medium Enterprises (MSMEs) are a major contributor to the Indian economy, accounting for around 30 percent of GDP employing over 110 million people. A Small Industries Development Bank of India (SIDBI) study found that 67 percent MSMEs surveyed reported temporary closure for up to a three-month period during COVID in the financial year 2020-21 and over 50 percent of the respondent MSMEs experienced a decline of more than 25%in their revenues during 2020-21. It is absolutely imperative for MSMEs to leverage digital technologies to become more efficient than their competitors, create more innovative products, and access a large network of markets in a post-COVID world.
MSME leaders need to proactively connect and collaborate with partners and key stakeholders for innovative digital business applications. The vibrant Indian startup ecosystem developing affordable and easy to use digital solutions can have a positive impact on the MSME sector as the enabler and the educator of the MSMEs.
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