Covering the last mile

The balance of economic power, globally, is moving away from a physical resource-centric base to an innovation and technology-centric resource base. The countries are being reckoned based on their innovation capabilities. This change has enormous implications for a country's overall economic health in terms of policy priorities in general, and more profoundly in the technology arena. Countries like India have been burning much midnight oil in designing a conducive technology ecosystem to facilitate the growth and progressive rise of a new-age technology-at-the-centre economic development model. A technology ecosystem, as is commonly understood, is a network of interdependent and interconnected entities capable of spurring innovations.

A technology ecosystem, by itself, may not be adequate to take forward the virtuous consequences of a tech ecosystem unless it is complemented by an equally resilient entrepreneurial ecosystem. For a country like India where still a significant percentage of people live in rural/semi-urban locations, the challenge is more complex due to the absence of growth of the local entrepreneurial ecosystem. A technology ecosystem, without the support of a complementor in the form of an entrepreneurial ecosystem, may remain a stand-alone entity, with no culpable sign of an impact on the economic development of the larger community.

To become an economic powerhouse, India is betting on technology-driven innovation and entrepreneurship. National-level programmes, policies, and initiatives bear evidence of this. India is now the third largest startup ecosystem in the world, behind only the United States and China. India Stack, which consists of identity, payment, and data layers, is an example that has not only altered the national landscape in a short span of time but is also gaining international recognition. The icing on the cake is that many developed countries are reported to have shown interest in signing up with the government to use India Stack.

Currently, much is visible and discussed in the technology ecosystem at its first layer, built as a national initiative driven by numerous policies and programmes. However, less is talked about the crucial last layer consisting of end-users and immediate local service providers at the grassroots level of the citizenry. For our analysis, end-users are the people who live in villages/semi-urban parts of the country, and immediate service providers are local entrepreneurs who can facilitate and drive the fruits of the technology ecosystem to the very common people.

This third layer, what we are calling the last-mile ecosystem, provides a foundation for economic resilience against external shocks as well. If this last mile is not connected and the intended benefits of technological innovations continue to elude the common people, the best of the technologies — be it indigenously developed or procured from outside — will not be of any major consequence to the masses. In such scenarios, the national governments may find it difficult to sustain their investment. UPI Payment stack may become stale if the people at the village level are unable to transact due to a lack of technology connectivity; the best academic content may become redundant if a student is unable to stream it; the window for the best yield harvest may close by the time a farmer receives the correct information due to lack of technology outreach and so on.

Recently, the government, under the aegis of the Bharatnet Project, funded through the Universal Service Obligation (USO) Fund, experimented with a pilot called “Udyami” to address the issues and bridge the digital divide at the grassroots level. The scheme is being implemented by the national telecom operator, BSNL. Utilisation of Bharatnet via Fiber to the Home (FTTH) connection is the primary objective of the Udyami programme.

As part of the launch of this programme, four blocks (one in each of the country's North, South, East, and West zones) were selected for saturation of a block with FTTH connections, with BSNL proposing to connect all of the Gram Panchayats in the block so that 5 per cent of the homes have FTTH connectivity. The primary objective was to conduct a demand and impact analysis when FTTH connectivity is made available to a certain percentage of households in a particular region. Initially, a two-month pilot was launched from October 1 to November 30, 2022, to provide 40,000 connections. Later, it was extended for an additional two months with a goal of one lakh connections. Now, the extension of the same to 5 lakh connections across the country is being considered. The most significant result of this programme has been the high data utilisation of rural customers. Aggregate consumption has increased from 1,200 TB per month in September to more than 10,000 TB per month in January.

The pilot project has given a few critical learnings. Firstly, the cost of the Optical Line Terminal (ONT) and installation charges act as an entry barrier which, if seen in isolation from the utility at an affordable monthly cost, will make people not opt for the scheme. The word-of-mouth publicity of 24x7 high-speed unlimited data with concurrent 3-4 users through FTTH in comparison to 4G mobile (1/1.5 GB daily pack per handset) will be the best penetration proposition. Secondly, the lynchpin in the scheme is the “Udyami”, the local enterprising person who has to invest in last mile mini-OLTE infra to cover the Gram Panchayat (GP) and services required for reaching to customer’s premise from the mini–Optical Line Terminal (OLT). Thirdly, the process involves three key steps, which are the digital onboarding of the customer, the utilisation certificate by the customer, and the digital payout process to Bharatnet Udyami. To start with, BSNL is covering certain expenses which the Udyami has to incur as part of completing the infrastructure to the doorstep, however, in the long term, the Udyami will have to be innovative enough to make this sustainable. Women, if made an integrated part of this implementation process can be a game-changing proposition.

This backdrop of an entrepreneurial ecosystem and a particular scheme being led by a telecom major leads us to many takeaways: i) the policies percolating from top to bottom get lost in transition if robust mechanisms are not thought of for tackling implementation challenges at the grassroots level; ii) the people who have remained untouched by the national parameters can’t be left so for a long time; iii) to make the national initiatives successful the intended end users have to be onboarded as soon as possible. The project has all the potential of turning into a mascot of change at the grassroots innovation landscape, providing its economic viability is institutionalised instead of keeping it loose and open-ended.

This structuring of the technology ecosystem into different layers can usher in a new and innovative construct for technology proliferation intertwined with economic upliftment at the grassroots level. As a construct, it can imbed the power of digital skilling as well as serve as a cogent instrument of economic inclusion.

The current G20 Presidency torch, which India is holding, gives an opportune moment for India to showcase this unique model of the integrated ecosystem to the world community.

RK Mitra a former civil servant and is Principal Advisor at the Center For Digital Economy Policy Research, Delhi; Kulbir Lamba is a Research Scholar at IIT Jodhpur. Views expressed are personal