Proceedings of Annual Paris Business Research Conference
13 - 14 August 2015, Crowne Plaza Hotel Republique, Paris, France
ISBN: 978-1-922069-82-5
Digital Economy1 and Economic Development of India:
On Bridging the Gap in Digital Divide
Kailash Nath Mahapatra and Vimal Patnaik
Statement of Problem/Research Question:
Withering the odds of hovering global recession, digital economy continues to
contribute enormously toward India’s economy. Could this ‘digital economy’
contribute toward more balanced, ‘non-enclave’ and equitable ‘economic
2
development’ and growth in India ? The paper explores this question in the
context of explosive current state of growth and even more portending potential
3
in mobile (3G and 4G-LTE) and broadband technology in India and comparative
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data from other developing and developed countries .
Methodology, Period of Study and Review of Literature:
The digital economy (Independent Variable), its impact on economic growth
(Dependent Variable) and the crucial role of the State or Government of India
5
(Intervening Variable) span the literature review and the period from the time of
liberalization in 1990 up until now in this paper. The research follows
comparative studies of two models (emerging/developing vs. developed country)
spread across 6 countries.
Findings and Suggestions:
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The paper argues for increasing value added chains ; more efficient mobile and
broadband links for domestic benefits through offshore collaborations with the
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developed country’s enterprises ; longer and larger ‘spill-overs’ to the ‘rural’ and
8
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local economy to bridge the urban-rural divide ; and improved e-governance .
The paper makes a strong case for Indian Government to be better regulator and
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facilitator than a competitor or provider of unsolicited export subsidies. And by
helping in removing labor market distortions and infrastructure constraints, the
government can redefine parameters of Public-Private partnerships on more fluid
terms and institutionalize balanced impact of digital economy on both rural and
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urban sector .
Field of Research: Economics (Role of Technology Advancements, Emerging
Economies and/or Economic Growth & Development)

Dr. Mahapatra Kailash Nath, Ph.D. (Yale), Kasar Technologies and Brentwood-Infoscribe,
U.S.A.
Email: kailash.nath@brentwoodinfoscribe.com, naathkailaash@gmail.com,

Patnaik Vimal kumar, MS Telecommunication (Networks) Engineering, University of London,
U.K. Email: vimal.patnaik@yahoo.co.uk
Proceedings of Annual Paris Business Research Conference
13 - 14 August 2015, Crowne Plaza Hotel Republique, Paris, France
ISBN: 978-1-922069-82-5
References:
1
Digital Economy has been interchangeably used as Information Communications and
Technology (ICT) and/or Information Technology (IT) throughout this article.
2
This is a very complex question for all of us in academics, businesspersons, technocrats,
techno-administrators and even e-Governance or other experts. The criticism that digital
economy like some other sub-sectors in India has grown into its ‘enclave’, insulated from
the common person or needs of distributive justice, notwithstanding the collateral jobcreation in hospitality, education/schools and other sectors. A lot of research and analysis
has been done as to why and how this ‘enclave like’ inequitable growth happened in the
first place? However, here in this article, authors want to emphasize, that the focus is on
two aspects: a) what could be done to transform and ameliorate this ‘enclave-like growth’
onto more ‘non-enclave’ and balanced growth pattern! And b) what lessons we have in
general from similar developments in the digital economy of other developing and
developed countries like China, Brazil, South Africa, the UK, Canada and the US.
3
Of a whopping 889 million current mobile phone users, 292 million users are from rural India.
This exponential growth is predicated to generate massive revenue of about $400 billion by
2020. The optimism has spurred the Gov. of India to recalibrate and plan toward increased
allocations for domestic manufacturing and R & D of ICT products. More details in:
http://economictimes.indiatimes.com/news/economy/indicators/India-to-become-worldsfastest-growing-economyby-2013-15-Morgan-Stanley/articleshow/6322333.cms
Mobile/Wireless technology especially augurs two biggest infrastructural and resource
advantages for business enterprises India: 1. Wireless is relatively easy to install than
cable and landlines; 2. Numerating or teaching illiterates numbers 1 to 0 is nothing
compared to making all literate. A glow in the face with a mobile phone in the ear of an old,
st
illiterate farmer is the landmark picture of technology in 21 century billboards. See,
st
Stewart Johnson, “The Coming of Age of India in 21 Century”, Working Paper, Fall 2007,
Yale University, New Heaven, Connecticut, USA.
4
In this sense, authors want to emphasize that this is not just a case-study research paper
rather more issue-oriented on digital economy and development in that it has drawn
on data from several developing and developed countries, especially China, Brazil, South
Africa, the US, Canada and the UK. Given almost similar population density of more than
a billion of people like that of China, the comparison with China on ICT and many other
counts seems so obvious. Perhaps the biggest strength in the group of BRICS (Brazil,
Russia, India, China and South Africa) and also as compared to the other countries in the
world, India is perhaps the only country that is not aging. If David E. Bloom of Harvard and
other demographers and economists are trusted, that in one estimate by 2020, India will
have about 450 million in the most productive-age-category of 15-35. Here again the big
question, as in our paper, is: could India train, educate and get this massive populace
th
ready to metamorphose scary estimates of ‘population bomb’ of 20 century into
st
‘population dividend’ of 21 Century. There are more references in the article but for now
see: ‘India’s Demographic Moment’,
http://www.europeanbusinessreview.com/?p=1345 and David E. Bloom, World Economic
Forum, Davos 2010, IdeasLab with Harvard…
5
Here we have delved into data from Planning Commission of India, private corporate entities
like NASCOM (National Association of Software and Service Companies) and ICCI (Indian
Chamber of Commerce and Industry) as well as primary and secondary sources from
interviews, journals and books in addition to comparable organizations and sources from
China, Brazil, South Africa, the US, the UK, Canada and few other countries.
6
See, “Telecos bank on VAS for 3G revenues”, CIOL Feature, November 2008
www.ciol.com/content/51108112265.aspx
Proceedings of Annual Paris Business Research Conference
13 - 14 August 2015, Crowne Plaza Hotel Republique, Paris, France
ISBN: 978-1-922069-82-5
And, “India’s Broadband Technology: Vision 2010”, Confederation of Indian Industry (CII
Document); Approval Pending…
www.indiatelevision.com/headlines/y2k4/mar/cii_report.doc Planning Commission:
Eleventh Five Year Plan (2007–2012), Foreword
http://economictimes.indiatimes.com/news/economy/indicators/India-to-become-worldsfastest-growing-economyby-2013-15-Morgan-Stanley/articleshow/6322333.cms
Also see, Broadband Technology Overview: White Paper, WP 6321, Issue: June 2005,
ISO, 9001, Registered.
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David Lehr, Dialing for Development, Stanford Social Innovation Review • Fall 2008
8
Among other works, see Bhaskar Ramamurthy, “Broadband Technology for Rural India”,
Working Paper, April 2006, Department of Electrical Engineering, IIT-Madras, Chennai 600
036, India.
9
For a detail discussion on e-Governance, see Kailash Nath, “e-Governance: Strategy,
Prescription and Prospect for Common Person”, International Telecommunications Society
(ITS) Biennial Conference, Montreal, Canada, June 20-22, 2008 (www.its2008.org)
10
We owe this insight to Swati here. Please see: Swati Prasad, ZDNet Asia India’s 3G, WiMax
rollout may be pushed to 2010, Friday, February 20, 2009,
www.zdnetasia.com/tags/swati-prasad and also see: N K Goyal, Founder of
Communications and Manufacturing Association of India, “Internet and Growth in India”,
April 10, 2009 www.connectworld.com/articles/recent_article
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See Nir Kshetri and Nikhilesh Dholakia, “The Evolution of Broadband Industry in the
Developing World: A Comparison of China and India”, IGI Global, 2008.
_____________________________________________________________________________
Authors:
Dr. Mahapatra Kailash Nath
3 Clark Avenue
Old Saybrook, CT 06475 U.S.A
kailash.nath@brentwoodinfoscribe.com
naathkailaash@gmail.com
+1 401-343-0080 (Cell/USA), +1 514-549-2928 (Cell/Canada)
Vimal Kumar Patnaik
12 Chalk Road,
London, E13 8PE-GB
United Kingdom
Vimal.patnaik@yahoo.co.uk
+44-7424334743 (U.K), +44-7577433392 (U.K)
+1-909-666-4019 (U.S)