Inclusive and Sustainable Industrial Development through Digitalizatal transformation.
Background
Digital transformation is specifically not about IT or technology. It is redefining entire business model on the backbone of technology. Government institutions and private sector organizations have been hardest hit by the COVID-19 pandemic and Ukraine war, disproportionately affecting institutions, in turn, people and places. The restrictions to mobility, trade and business activities to contain the virus have forced employing agencies to suffer revenue losses and even others to close operations. However, the crisis also raised a new opportunity, heightening the importance of digitalization and accelerating digital transformation. During the crisis, digital technologies have been essential for many both government and private sectors to sustain economic activities and provide necessary services. The digitalization of employing agencies is integral to building an inclusive and resilient economy and societies. Internationally organizations have been adopting their business models through the uptake of digital tools during the pandemic.
The digital use is the most important issue for Micro, Small, and Medium Enterprises in Nepal. The digital economy's strength has been demonstrated to be valuable, and its application can improve communication skills, interpersonal skills, and company operations and performance of SMEs. While the possibilities are numerous, many natural resources; many governments' productive human resources; many partners working together to create MSMEs. It is a challenge for the government and concerned stakeholders to create a favorable environment for them by reviewing existing policy which encourages market availability by imported products of superior.
Small and Medium-sized Enterprises (SME) and Startups have been lagging in the race of digital transformation in Nepal due to poor Academia and Industry integration. They are missing opportunities to reduce costs and compete on more footings. Those who are adopting digital model they are often outsourcing digital solutions. Covid -19 has accelerated digitization, however, risks have intensified for instance digital security attacks called Cyber pandemic. Large policy consensus is needed to speed the digital transformation and on how to do it (complexity? Scope? Targeted vs mainstreaming?) easing SMEs and Startups access to strategic resources. Among strategic resources massive investment on Human Capital should be among the top priority. Facilitation is necessary for fintech and alternative sources of finance including business innovation and supply of digital solutions improving their linkages to knowledge networks, hubs and platform for learning and testing. The digital transformation presents several opportunities but also generates new risks for economies, requiring the implementation of adequate policies. Despite high mobile phone penetration, significant Internet service coverage and progress in e-commerce, Nepal still needs to build infrastructure, develop human capital, promote innovation and deregulate the digital environment if it is to exploit its full potential. Government should invest on youth for engaging them in development works.
Digital Framework Nepal
The government released the Digital Nepal Framework, which contains 80 activities in eight categories. The Framework is the driving force behind Nepal’s digital transformation. And, despite inspiring an explosion of ICT growth in recent years, notably following the craze for ‘digital,’ the government has yet to give a big and tangible commitment. It was approved by the government on October 22, 2019 and has been included in the 15th plan as a game changer project. The effective implementation of the Digital Nepal Framework and achievement of all 80 initiatives under the eight sectors, requires enhanced ICT infrastructure and qualified human resources. The government cannot possibly achieve this goal without the support of the private sectors since the private sectors have been leading the technological transformation in Nepal. The government can invest in developing the required infrastructures and improve Cyber Security through public-private partnerships. Similarly, it can facilitate the stakeholders involved by drafting policies that create an enabling environment for them to work on the Digital Nepal initiatives. The government can also create skill development programs to develop a capable workforce.
Right business environment is required for regulatory framework, e-government and e-services, high quality digital infrastructure. Promotion of the whole of government approach in long term strategic frameworks, governance arrangements in emerging policy areas, selling consultative instances and advisory groups supported by THINK TANKs is necessary. Removing regulatory barriers and market distortions., expanding infrastructure coverage (speed, reach). building more evidences, comparable data, sectorial studies and business cases (successful or not) to inform all relevant actors, international cooperation and knowledge sharing are all necessary. Experts should explore the conditions under which digital innovation opportunities emerge in small and medium-sized enterprises (SMEs) for accelerating the Digital Nepal. Capabilities are required to shape the exploitation of digital innovation, namely market offerings and the digital business process. Human collaboration, technical, and innovation capabilities—human, technical, and innovation capabilities contribute to market offerings, while human, collaboration, and technical capabilities contribute to the business process.
Although the situation on the ground is improving, internet connection remains relatively expensive, slow and/or not always readily available. Spatial inequalities are marked in ICT connectivity with direct effects on territorial innovation, growth and job creation. Access to digital services also impact popular access to financial services. The research and innovation ecosystems struggle to fuel the entrepreneurship and SME sector with new ideas and opportunities. Academia is poorly linked with the private sector in Nepal. The country also suffers from low private sector funding for research and development (R&D), little public incentive to invest in R&D and unfavorable intellectual Property (IP) and Cyber Security policies.
Communication network
Nepal is investing in expanding access to broadband and engaging more people in the digital economy. The engagement of NGOs, INGOs and private sectors should be encouraged to work as eco - system partners with the concerned ministries of Nepal government. The new project funded by World Bank will support the implementation of the Digital Nepal Framework. Nepal’s goal is to promote an inclusive and secure digital economy that will connect people and businesses to information, services, and markets. The project will improve access to high-quality and affordable broadband services, especially for people and businesses in remote rural areas. It will also support and secure the delivery of digital government services through improvements in Nepal’s data infrastructure and Cyber Security. Specific activities will seek to boost internet use, digital skills and entrepreneurship, and access to digital services by women, ethnic and social minorities, and persons with disabilities. The project will also create better job opportunities for people by providing digital skills development training. SMEs to be effective engines of inclusive growth which is one of the constitutional requirements of Nepal government.
There is a need of strategies, policies and programs for the development of four components of this ecosystem, namely: high-speed networks, services, applications and users. There should be efforts to strengthen the service-based competitiveness (service-based competition) as well as in equipment (facilities-based competition) by reducing the cost of entry into the market and network development. Institutions should be formed with the purpose of organizing a well-designed ICT market, and their activities with well-regulated improved authority responsible for licensing and supervising telecommunications activities focusing on high quality of services and affordable prices for the citizens. Broadband-supported tools in regional countries are enabling MSMEs access to and easier management of information technologies (IT). These tools are offering new ways to communicate and reach customers. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth.
AI and services
Most of us have grown used to ecommerce applications providing us with personalized product recommendations, news sites, advertising platforms and other entertainment platforms and other entertainment channels, push content of our preferences to our devices. Not many of us pay much heeds to the facts that this is all driven by advancement in AI, Machine learning(M)(, Analytics etc
AI as a service allows organizations to exploit state-of-the-art AI, ML, and cognitive solutions without heavy investments into infrastructure, skilled personnel, or maintenance overheads. It acts as a driving tool to boost add-on functionalities into existing products and services. AI will play an even greater role in the service delivery process with machine learning models able to predict with greater and greater accuracy. While the promise of AI is not yet fully realized, there are already many ways to integrate it into existing service and support channels. One of the most common use cases for AI in field service is for AI to identify the right field service management resource to address a particular task at a time that makes sense for both the customer and the business. This is a challenging problem that depends on the characteristics of the task and the capabilities of the field service professionals, amongst many other variables, to determine the solution. AI and machine learning are now becoming essential to information security, as these technologies are capable of swiftly analyzing millions of data sets and tracking down a wide variety of Cyber threats — from malware menaces to shady behavior that might result in a phishing attack. These technologies continually learn and improve, drawing data from past experiences and present to pinpoint new varieties of attacks that can occur today or tomorrow.
Nepal should start embracing Artificial Intelligence (AI) for the digitalization of the nation. Regional countries are rolling out Five G (5G). India is drawing strategies for 6G. Nepal is behind and should review the communication infrastructure policies. Future technologies like artificial intelligence, robotics, big data, blockchain, and IoT will be widespread. In regional countries strategies for adopting AI backed by acts and preparing right kind of frameworks are already on the way. Nepal should also start necessary initiatives by engaging concerned stakeholders. In Feb. 2019 IT Bill was proposed in the house of representatives, however, couldn’t get approval because it threatened the freedom of expression. Government has drafted Cyber Security ACT and is collecting feedback from concerned stakeholders. Reviewing is important for digital transformation. Article 28 of the Constitution has declared the right to privacy and protection of information as a fundamental right. Although privacy was protected in some way under the Criminal Code, the Individual Privacy Act 2018 (“Privacy Act”) was introduced with the purpose of giving effect to the constitutional right.
Human Capital Management (HCM)
One of the emerging development strategies to exploit technology is to develop the country’s human capital to be of high caliber with goodness, ethics and morals, discipline, and a positive attitude toward society. New emerging trend is to focus on the most essential issues is education for human capital building. Empowered people with capability of exploitation of emerging technologies will become the work force that drives a sustainable developed country. Old historical scientific evidenced based facts should be the approach backed by Buddhist concepts for teaching and learning. The holistic view of the world in which everything is interrelated, the discipline, and the interpersonal relations. The western concept emphasizes the development of knowledge, skills, and behavior whereas the Buddhist approach polishes inside, or develops people’s minds and souls.
Buddhism, though primarily misperceived as merely a religion, can be regarded as an integrated source of ideas and insightful learning for so many disciplines and branches of human knowledge, which we are even unaware of till the date. Buddhist values are found incorruptibly alert and alarmed to highlight the profound principles of organizational work ethics, business values, rules and regulations, theory, doctrine, precepts, moral conduct and behavior of the people which are few of critical discussions that modern management practice urges to gauge the success of any institutions. Highlights on the relationship between Buddhist values and work. ethics on human resource management (HRM) practices and organizational performance are important.
An organization in hyper-competitive global economy is only as innovative and successful as the talent it attracts and energizes. Today’s institutions demand not only people with STEM (science, technology, engineering and math) skills, but also for people who have the innovative acumen to help differentiate themselves from competitors. Supporting institutional growth requires balancing skills requirements across disparate global labor markets with fast changing economic conditions. This accentuates the role of human resource executives, who are increasingly being called upon to serve as strategic partners to their businesses. To respond to these challenges, HR executives are looking to accelerate digitization to more electively attract and retain needed talent, as well as to manage services and requirements in a more streamlined way. There’s a significant self-service aspect to modern Human Capital as well, and for current and potential employees, the ability to manage their work lives through online services ensures higher levels of satisfaction and productivity. For business leaders who are also promoters of ICT, modern Human Capital, with its cloud-based tools, provides a more complete visual picture of the employment lifecycle and helps bring together formerly siloed knowledge and work practices of enterprises. Fully digital Human Capital will also help bring about a corporate culture that emphasizes talent Human Capital management that are agile and adapts to changing markets and opportunities for the business. Digital Human Capital Management is transforming HR, with all its many aspects. Digital Human Capital has a huge productivity impact, as it frees up HR managers’ and professionals’ time, enabling them to focus on activities that are of more strategic value to their businesses. Moving with the speed of the technology today allows people to be strategic and leverage data, and make strategic business decisions. During this phase academic curriculum should be redesigned so that teachers focus on students on training of minds in computing way backed up by knowledge of Mathematics so that they learn to adopt with the digital world.
Education ministry of Nepal has to play lead role in introducing AI in the school curriculum by developing an integrated curriculum, and AI as an elective subject implementing in classes 8-10. Guardians should be made aware of the new developments and concerned stakeholders have to be proactive in giving students ample exposure to AI. To prepare the future workforce to live and thrive in a society where this piece of technology is so fundamentally ingrained, several schools are now offering age and level appropriate training in artificial intelligence, programs in innovation and integration of technology in education. AI has also grown out of disciplines such as Science, Mathematics, Philosophy, Sociology, Computing and others, and hence, it is the right thing for any school to recognize the importance of integrating AI readiness to maximize learning across disciplines.
Real-time data visibility, performance transparency and on-demand accessibility drive valuable insights and fosters data-driven conversations, greater collaboration and faster decision-making among functional teams across the business. Artificial Intelligence (AI) Must Be Part of Human Capital Management. ‘The purpose of Human Capital Management is to acquire, manage, and optimize the workforce that drives a modern business and powers the achievement of its mission and financial goals.’
In managing the intersection of business, society, teams, and individuals, that we find a rich opportunity to be helpful and make an impact – to give a more diverse and complex answer than just saying ‘my job is to acquire, manage, and optimize people’.
In HCM we throw ourselves into a fascinating mix that brings rules, policies, and structure to a target audience that has the human traits of unpredictability. With the ‘human’ side of HCM comes a new wave of technical, business, and psychological innovations to better understand how we think, act, and perform as humans in the course of our jobs.
AI is a beneficial partner to HCM. Four points will converge (1) a definition of AI that aligns with the human resource channel, (2) quantitative measures that assist in building an unbiased view of the talent pool, (3) qualitative tools that augment and enhance the HCM function, and (4) cautions and reminders.
Think Tanks
Nepal also needs THINK TANKs to work with volunteers from not-for-profit Think Tank, staffed mostly by volunteers from the tech world, who dedicate their time, energy and expertise towards Nepal’s hard problems.
They should find market players and government entities with the conviction in this approach and help everyone work together and function together. In practical terms, this means that the government builds the digital public infrastructure, and the market participants build businesses on top of it. Groups in regional countries have iterated this model and are continuing to improve and refine this model. To play such a role they use their mission to align with the Government partners, Market partners and their own volunteers.
They should convert ideas into policy proposals to take to the government, stakeholders. As part of their advocacy efforts they should explain, educate and inform government policy makers and other policy bodies that a vibrant software product industry is vital to Nepal’s future for digital transformation. They should have symbiotic relations with trade organizations including professionally run institutions and see them leading the charge of converting policy prescriptions into reality.
SMEs and Startups
SMEs and Startups have been adopting their business models through the uptake of digital tools during the pandemic. In Asia and the Pacific region where the use of digital platforms was fastest-growing in the pre-pandemic days, the demand for digital technology-based products has surged in 2020 despite the overall economic downturn. Youth mass is greater in Asia. Timely interventions to accelerate SMEs and Startups’ digital transformation is critical in taking this momentum for sustainable productivity growth and speed the recovery across the region. The digitization of South-East Asia’s economy is being experienced unevenly, and the gaps with large companies remain huge, widening inequalities. Digital divides are associated with gaps in productivity, scaling up, innovation and growth. Most of the SMEs face difficulties such as lack of information, digital skills gaps, insufficient capital to finance, volatile regulatory environment, and accessing affordable digital infrastructure. Nepal government should learn from regional countries for creating right framework for the digital transformation of SMEs and Startups with more innovative public-private support.
Private sectors of many countries are promoting digitalization among their networks, engaging specialized start-ups. SMEs are the enablers for implementing digital strategies through tailored services and products. They should have a collective mind to address structural barriers such as skills gaps and lack of digital infrastructure and facilitate fintech and innovation. Cooperation among public and private sectors is key in enabling the digital shift of SMEs and Startups to overcome the challenges and seize the benefits of digitalization. Regulatory and policy frameworks are crucial to the development of startups and SMEs. The frameworks in general come with preferential assistance for startups and SMEs, such as tax incentives, specific regulations, training courses, initial funds, and investment matching. Nepal should learn from the experiences from other countries and engage concerned stakeholders for necessary interventions. The complicated criteria for government support and finance, policy creditability, government-centralized policy, a shortage of assessment of policy outcome, and a lack of regional cooperation on policy discourages investors. The international and regional cooperation on SME regulations and policies facilitates the connectivity of regional startups and SMEs countries. Human Capital development is necessary for supporting such initiatives. SMEs and startups do not always have digital strategies. They need such a strategy for a holistic and successful digital transformation to support good ecosystem.
Public Private Partnership
The public and the private sectors have increasingly forged working relationships and is the today’s world. The use of PPPs is not new in Nepal. Different forms of PPPs have been used worldwide to deliver infrastructure services and PPP remain a relevant tool to be considered as a means to increasing and improving the delivery of infrastructure services. It is basically judiciously preparing leader and team for a PPP model. It is also establishing leadership credentials with team that are based on ethical values, sound judgment, humility, and integrity. It is personally, embracing collaboratively developed shared visions and goals which will encourage team to embrace leadership vision. Engagement of THINK THANKs will help in accelerating this process in Nepal. IT tools are available to measure the effectiveness of the public–private partnership (PPP) leadership and measuring the vital skills and competencies that PPP leaders possess to ensure the success of PPP models. Nepal too should build a sound framework to facilitate the execution of PPP models by going through the learning experiences of other countries by engaging competent local experts. Government initiatives and incentives are necessary for all interested SMEs and Start-ups with a focus on Intellectual Property, Cyber Security and Innovation through global and local PPP programs for supporting SMEs’ R&D and global technology exchange.
Private sectors are also playing an important role by promoting digitalization among their networks, and specialized start-ups support other SMEs to implement digital strategies through tailored services and products. They should have a collective mind to address structural barriers such as skills gaps and lack of digital infrastructure and facilitate fintech innovation. Ultimately, cooperation among public and private sectors is key in enabling the digital shift of SMEs and Startups to overcome the challenges and seize the benefits of digitalization.
Policy makers have been formulating policies and designing programs to develop small and medium sized enterprises (SMEs) with a view to create jobs and achieve inclusive growth. SMEs continues to face barriers to growth. Partial implementation of reforms explains some of the underperformance, but frictions in strategy design also played an important role. Sustaining current reforms is, therefore, not sufficient to achieve inclusive growth. Digital technologies have potential to boost SMEs productivity and growth and economies are rapidly digitalizing, thus SMEs need to embrace digital solutions to compete and survive. Therefore, for SMEs to be effective engines of inclusive growth, a rethinking of the SME development strategy is needed that makes SMEs’ digital transformation a priority. Human Capital development initiatives, Cyber security and IP issues should be handled through public-private partnership functioning. It can also facilitate the stakeholders involved by drafting policies that create an enabling environment for them to work on the digital Nepal initiatives.
Women’s agenda
Women, during Covid-19 pandemic, faced some of its most severe and unforeseen impacts. The pandemic exposed deep, structural inequalities that exist within social and economic systems. The pandemic posed a threat not only to livelihoods from inadequate social protection systems, but also to women’s security as violence against women has increased in the country. As endorsed by the adoption of the UN Security Council Resolution 1325 on ‘Women, Peace and Security’, women play an essential role in peace and security activities, including in accelerating economic revitalization in the aftermath of conflict and emergency situations such as the Covid-19 pandemic. Economic empowerment of women not only contributes to more peaceful and resilient societies but also protects women from issues such as domestic violence. Applying a ‘Women, Peace and Security’ lens to response, therefore, provides valuable guidance on the fundamental need for women’s rights and women’s leadership to be at the forefront of recovery. Government should speed up training to support women to start their own businesses, through training ranging from technology adoption in financial literacy to business planning to ensure that women and girls in Nepal are economically empowered and resilient in the face of crises, now and in the future. The Covid-19 pandemic has widened gender and other inequalities in employment, with women (and industries dominated by women) experiencing the largest job losses. And men currently earn most degrees and hold most jobs in these future-proof areas. This pandemic has taught the world a lot of lessons.
Do the senior elderly citizens of Nepal have sufficient knowledge and skills to record the learning lessons in order to generate correct narratives for future generations? Girls especially should take interest in capturing and downloading the valuable contents of past experiences of elderly citizens before they fade away. These meaningful contents add value to current and future generations. Women seemed to have a different risk perception and desire for protective action than the men in their lives. Researchers found that there are many barriers that disadvantage women in the event of a disaster, leaving them behind when it comes to decision-making and potentially slowing down their recovery. Eliminating the male head-of-household model is crucial for speeding overall household recovery.
Challenges and recommendations
Ensuring protection of data, Intellectual Property (IP) and Cyber Security is a rising challenge in Nepal. All Startups, SMEs and Enterprises should be taking concern. It is difficult to streamline the few successful models adopted by private sectors. Government is abiding by strict policy and regulations. Security specially to ensures IP and Cyber Security issues should be the top priority. Environmental failure is another problem as Nepal is prone to natural disasters and also man-made disasters through unplanned infrastructure in natural resources. IT solutions to handle such situations should be encouraged.
New setup / development on IT and AI creates a new opportunity to invest in business development. More cooperation on software base development, collaborative engineering should be promoted. Government should emphasize more to adopt successful model developed by the private Sector. There should be focus on creation of a more cooperative extension of international agencies. Top priority should be given in the area of Human Resource Development to add in the new development markets. Enhancing of the collaborative monitoring and evaluation for ensuring transparency and accountability in donor projects is necessary. Equal investment is necessary in all parts of the country for digital transformation to speed up implementation of Digital Framework Nepal. G2G collaboration for easy access of working visa to hire high skilled work force from Nepal is necessary for technology transfer and international collaborations.
It is important to promote the meaningful workshops for diplomatic corps, policymakers and representatives of private-sector who are leading the change for identifying the barriers as well as opportunities in the digitalization of SMEs and Startups with a special focus on Public-Private Partnership for providing broad range of policy areas and digital strategies including SME financing, innovation, productivity, skills, and others. It eventually helps key factors at national and local levels localize new innovations in countries, further, to achieve broader inclusive growth and economic development in the region.