Digital Transformations and Structural Exclusion Risks: Towards Policy Coherence for Enabling Inclusive Trajectories

Weaving together the literature on technology evolution, information society and digital economy, this chapter argues that several intrinsic structural features of many digital markets make them inherently exclusionary. These, together with the strategies used by digital innovators and fast followers to sustain their competitive advantages and prevent new entry, cause the adverse incorporation of developing country economies into these markets and lead to asymmetric benefits for them. This presents new challenges to the Indian economy in the ability of its firms to survive. Despite the large canvas of new opportunities offered by digital technologies, digital technologies can therefore entrench some of the existing inequalities in technology access and use, and also generate new inequalities. With data as the prime driver of several new digital technology systems, policy choices in the digital space will decidedly influence India’s digital transformation trajectories in the services, manufacturing and agricultural production spaces, as well as their societal outcomes. In particular, the national data governance regime, in relation to data ownership, security standards and data access, has a critical role to play. In order to ensure that emerging technology and business models promote competition and broader developmental benefits, the government also needs to formulate stronger antitrust policies, which acknowledge the economy-wide implications of control by digital monopolies. Reformulating trade, investment and technology policies to reflect the above concerns also come in the ambit of the institutional/regulatory shake-up that is urgently needed to allow secure, sustainable and equitable digital transformation by India.