IBM: India’s Economic Growth Potential Can Boom with Blockchain and Demographic Dividends
Since independence, more than seventy years ago, India has been slowly trudging towards development. It has been routinely hindered by war and its own bureaucratic shackles. By contrast, Blockchain is only a decade of young and craves regulatory restrictions. Still, these apparent polar opposites seem to be able to aid the other in a mutually beneficial relationship.
Indias greatest asset is its demographic dividend; the economic growth potential resulting from the population’s age structure, such that there are more working-age people than the non-working. Blockchain needs to avoid stagnation, so a new market where there are consumers, as well as developers, would be ideal for it.
Indias bulging population has the advantage that more than half of its 1.2 billion inhabitants are under 30. This asset comes attached to its own set of problems and they get magnified especially in the Indian milieu. The previously mentioned redundant bureaucracy becomes more glaring in light of poorly managed distribution setups, barely functional social security, overutilized healthcare, periphery access to financial instruments, rising unemployment, and simmering social unrest.
Glancing at the slew of problems one thing is apparent, they can be seen as interdependent and collate to mostly poor governance stemming from a lack of transparency, digitization, and automation. Things that blockchain enabled services would provide.
And this might be easier done than expected. India produces an estimated 1 million engineers every year. Reskilling a certain percentage to work in blockchain technology should inspire frictionless products for the nations distribution network. This sounds even less far fetched as one realizes that the country already has a booming IT sector and the present government has been making concerted efforts to incentivize higher levels of training.
In all this, it needs to be remembered that India remains a largely undigitized country. Prime Minister Narendra Modi has been working to change that and usher in a change. While it is a herculean task that he attempts, the blessing for India is that, if done correctly, it could jumpstart its digital infrastructure by using blockchain and overtake most nations that are still on legacy systems. This will undoubtedly streamline the entire process and along the way save the government heaps by eliminating needless middlemen.
Yet this tremendous opportunity looks set to be squandered. For all of Mr. Modi's intents, his ministers have been openly hostile to the idea of cryptocurrencies, a result, and prime use case of blockchain technology. Furthermore, the Central bank has made it all but impossible for cryptos to be used.
Yet for all the distrust, the Indian government too recognizes the possible advantages and is actively seeking blockchain proof of concepts [POC] on various local issues. These use cases could propel the establishment of smart cities across the land.
Blockchain has the potential to be the infrastructure over which newer and more efficient systems are based. A decade ago Indian tech firms made a name for themselves and ushered in the age of outsourcing. Now India is again poised in a similar position where it can use its young population to leverage the that potential and take advantage of the huge business opportunity which sees the rising need for management of a huge variety of services.
After making all the fuss, the governments planning department has conceptualized IndiaChain, for better maintaining their land records, agriculture, and healthcare. Even the banking sector, despite the ban, is exploring POCs on financial lending. Tech companies are working on implementing concepts to supply chain financing. Lastly, a Blockchain Academy in the southern state of Kerala has become the first academy in South Asia to get Hyperledger membership.
This is easier said than done, India still has a high infant mortality rate and poverty issues to battle. While there are huge numbers of professionals, apart from a few highly rated institutions, the overall quality of education is suspect at best. And then there is the challenge of raising capital to take on such a venture.
It should also be understood that adopting blockchain is not the only viable solution and will certainly not eliminate the country's problems wholly, yet it shall do it substantially and, with time, in greater measure. At this stage, both seem ambivalent, at best, about the other; unconcerned about the opportunities that both parties are clearly missing out on. One can only hope that either or both see this and work towards a better future.