Start-ups and the IT industry can leverage the data universe generated from digital transactions and build innovative products
Evolution in technology has fostered ubiquitous digital connections, bringing together people, devices and objects across platforms. Predominantly, verticals like banking, financial services, insurance, retail, healthcare, hospitality and education are sprinting into the digital realm, putting identity at the centre of the digital ecosystem. Consequently the identity of people is exposed to cyberthreats. According to RiskBased Security, 3,813 breaches were reported through June 30, 2019, exposing over 4.1 billion records. The Cybercrime & the Internet of Threats, 2018 report published by Juniper Research deciphers that around 33 billion records would have been stolen by cybercriminals annually by 2023. Such mind-numbing figures advocate why data protection legislation is paramount in a digital world susceptible to zillions of cyberthreats. The economy is becoming more globalised with the advent of digital connectivity and billions of people will be added into the ecosystem in days to come. Hence, it is imperative for Governments to safeguard their citizens’ personal data. This is because data is the new form of securitisation. It has tremendous potential to derive massive economic value by generating smart insights and utilising them as feeders for building new business propositions.
According to the United Nations Conference on Trade and Development (UNCTAD), 58 per cent countries have data protection and privacy legislations, while 10 per cent nations have draft legislations. This shows that the clamour for data protection has grown ever since the European Union (EU) laid the groundwork by legislating General Data Protection Regulation (GDPR) and executed it on May 25, 2018 to protect privacy rights of EU individuals. It also warranted that the law was applicable to all enterprises processing or controlling personal data of EU residents. Considering this and the rapidly-growing digital footprints of Indian citizens across various platforms, including the web, smartphones, storage media and other smart devices like the Internet of Things and sensors, there is a need for data localisation. Thankfully, the Government realised this early on and it led to the formulation of the Personal Data Protection Bill, 2019.
Data localisation may create opportunities for the Indian information technology (IT) industry and technology start-ups in terms of infrastructure and products suited to the requirement of the Data Protection Bill. Data localisation will also encourage domestic tech companies and international behemoths to venture into setting up massive digital infrastructure, like data centres, in the country. While data localisation will build a robust ecosystem for fostering local business models in data mining, data analytics and big data, it will equally boost opportunities for tech start-ups to build path-breaking products around data-driven businesses. Moreover, this will herald a new breed of skilled professionals like data scientists, analysts and warehouse architects to propel the growth in this segment. According to a report on the State of Analytics at Domestic Firms in India, 2018 by Analytics India Magazine and INSOFE, the Indian analytics, data science and big data industry is estimated to be around $30 billion. Of this, the domestic market captured $3.03 billion in 2019 and it is expected to double by 2025. Data localisation will further fuel the growth of this industry.
Sensing the potential of data analytics in eGovernance, the Centre is also planning to build an advanced technology platform to host and interpret huge amount of data that will integrate and help in better understanding of citizens’ data, spending patterns of the Government, consumption trends and the success of various Government policies. This will increase transparency in eGovernance by giving citizens access to the statistic. Data localisation is certainly going to catalyse this mission. The Government can also leverage citizens’ information for economic empowerment, address educational and health service challenges, foster financial inclusion and expedite verification and validation for Government schemes. The other dimensions of data localisation include thwarting of breeches, safety and security of privacy and curtailing of cyber frauds that happen very often in a digital world. When information is stored locally, the Government can easily access the payments data and investigate financial crimes expeditiously. The proposed Bill will provide the right framework to protect India’s sovereign rights on citizens’ details and strengthen its leadership in the digital economy.
The expansion of the digital economy will create opportunities to improve the social and economic standards of people living at the bottom of the pyramid by addressing challenges through data-driven insights. Since India is an IT superpower coupled with a high internet penetration and a strong business economy, the Bill seems to be very timely and this will revolutionise the entire gamut of services delivered by IT companies. In effect, this will build up a synergy between enterprises and the regulatory authorities to establish mature business processes, which, in turn, will help companies correct their business procedures to significantly safeguard data of citizens. Furthermore, start-ups and the IT industry can leverage the humongous data universe generated from digital transactions and build innovative products with a significant socio-economic impact while safeguarding a $1 trillion digital economy by 2025.
(The writer is Director General- Software Technology Parks of India)
