Morning everybody, it's really a pleasure to be part of this session and getting this opportunity to discuss Mr. Magow, the basic evolution and growth and where we stand in the digital aspect of our economy and in our country at this point of time. Meaning, somebody who has been part of it, has been an innovator and taking it ahead, it will be really very insightful to know his views on how we are poised to move ahead in this area. So, we will really open it with Mr. Magow's views on this subject. Today, digital and innovation go hand in hand. Whatever we call as innovation is seen to be digital, just as in the past, like the printing press, steam engine, a lot of other inventions happened. Today everything has a digital core. Digital is a great leveler, the entry barriers have been lowered. Unlike legacy industries where you needed a lot of capital, a lot of experience to open doors and become successful, a digital play provides a level playing field. The entry barriers are low, of course the competition after that is as stiff as it is anywhere else. So, how do you see, where were we earlier and how have we come to this point and how are we poised to move ahead? If you could just share your views on it, being a practitioner you would have firsthand experience.
Good morning everyone, and good morning Rishi, and please call me Rajesh. I think, like you rightly pointed out, yes, innovation is largely associated with the digital world today, but I would say it's actually technology. Technology has been leading the innovation at a very fast pace over the years. So much so that whatever product we are using today, take any example, take the automobile industry today, there's more software in the car than hardware. Take healthcare, there's so much software in healthcare equipment today. Pick any example, technology has led the way for innovating for the benefit of the consumer, from a consumption standpoint but also for businesses. If you look at the evolution over the years, it's actually pretty young. Specifically the digital industry in India, of course it was first led by the Western world, the US largely and to some extent Europe. The second phase of digital evolution was led by China when smartphones were born. The device suddenly changed and a lot of innovations came from China. I'm very happy to share that the third phase of evolution is actually being led by India. I'll give you a few examples. In a short span of a 20-year-old industry, MakeMyTrip is turning 25 end of March. We know that the first five years, 2000 to 2005 when we started, there was nothing happening. There was hardly any ecosystem at that point in time. So a very young 20-year industry has come a long, long way, not necessarily caught up with whatever was happening in the Western world, but also more importantly China, because China had changed the game as well. But we have also reached a point where we are leading with some innovations, specifically in the financial services sector. UPI is a great example of that, which we are trying to potentially lend that particular technology to other countries as well. And it's not only one example. You have to see this in the context of the scale and the size of the population in the country that we have, very diverse as well, from rural to semi-urban to urban. If you have to solve some of these problems of a large-size country and leading with technology innovation, I think it's phenomenal. And then the world can benefit from it. With the way at least we see it, having seen the last two decades of evolution happening, if I fast-forward and project it for the next 10, 15, 20 years, you will see tremendous amount of innovation being led by India. Not necessarily we would be following and catching up, because of the fact that we've got the talent, serious amount of talent, and I think we have evolved from just a catching-up stage to now leading the innovations as well, in very complex problems. If we are able to provide some of the solutions with tech innovation in the digital space, solving really complex problems, the rest of the world is going to find it very, very easy to follow. So I think we've come a long way and the future seems very, very bright in terms of evolution and specifically India leading the way.
Nice, Rajesh, you put it very well. But if we just look at it, I think much of the base which was provided for this digital innovation, the growth of this business, was also because of the way our telecom revolution happened in our country and the data prices fell. I don't think other countries where data prices are higher compared to us could have this kind of innovation. So really, we are a hub of innovation that way. I don't see the prices now moving in any way which will act as a hard hurdle.
Absolutely, absolutely. Data was one, I mean, telecom data pricing was one, and then also the devices, the smartphones. Devices over the years have become cheaper. They used to be very expensive. If you go back in history, it started with BlackBerry and Nokia, and today Android and iOS. The fact that Apple is actually manufacturing a lot of the phones and we're becoming a very important exporter of those phones out of India, we've come a long way.
Whenever we talk about our economy, the dominating theme is about inclusive growth. Inclusive growth is something which is required, it's a must, and in India, in case of disparities, it's even much more important. If you look at the digital future, digital as an engine of growth, there's urban India, there's rural India, there's a divide. Whether it's in every product, whether it's automobile, telecom, any gadget, FMCG, all these products. How do you see digital going forward? We still have about 250 or 300 million people on feature phones. Obviously, they will not be able to take the benefits of the digital side as much as people with smartphones. As you said, smartphones were also a factor fueling the digital growth. So, is there an issue with regard to digital growth also? Where does it bring more inclusivity, or do we need to do something to make it more inclusive?
Yeah, no, I think it's a great point. My view on this is that when you look at the evolution, the first lot that got benefited from this whole tech evolution, digital world evolution in India, was obviously the urban class and maybe the semi-urban class as well. I do see the next wave of growth, or the benefit that is going to accrue, is going to be rural India as well. I'll give you a few examples. The reason why I say that and I'm pretty confident it'll happen is because of the foundation that has been set. If you take your mind back, some of the foundational pillars that are going to drive inclusivity, already to an extent driving benefits reaching out to rural areas without any leakage, was actually in 2010 when the UID program was started by Nandan. In a country like ours, to be able to have one unique ID, and people sometimes forget that, but that was, is, and is going to be the real foundation. You needed one unique ID to be able to leverage technology on top of it. Once that foundation is set, every new person will have a unique ID in the digital world, which is critical for benefits to be mapped to that ID very digitally and very efficiently. That is a very big foundation. The second foundation is the UPI, democratizing payments, peer-to-peer transfer, and then the Aadhaar card leading to every person being able to open a bank account, link it with the Aadhaar card, all the benefits from an inclusion standpoint, without any leakage, intermediaries, etc., efficiently, quickly, going into the hands of real recipients in rural areas, is going to go a long way to benefit that economy. That is point number one. The other areas where it's already evolving and will evolve more is because of the sheer internet reach we have now. I agree there are 200-250 million feature phones, but some applications can now be used on feature phones as well, and smartphones are becoming even cheaper. I don't worry about the device anymore at all, because by 2030 we would be 1 billion people on smartphones, which is huge and will cover a lot of the rural population as well. Some of the areas I see where the direct benefit of internet reach through cheap devices is access to information. Many avenues are opening up for people who can sit anywhere and participate in business avenues or employment generation opportunities, not necessarily moving to urban areas, because you can do it remotely. Thanks to COVID, a lot of innovation has happened in terms of a hybrid way of working and operating, completing your job sitting wherever you are, because you've got the technology, the access, the data, the tools, and you don't really need to move your base. There's going to be a huge advantage in terms of access to the right kind of technology, tools, and information in rural areas. Some of that is already happening and will accelerate. The other thing that will help is that we need to do more work, and clear investment has to go into creating more awareness as well as real investment in the education sector and the skill development sector. A lot of people will have to come to terms with the fact that not necessarily the nature of jobs or the kind of jobs we used to think about 40-50 years ago. In our education system, there was a clear path defined, and then only three or four career paths you could choose. We will have to have a complete mind shift. There are so many opportunities. In the travel and tourism industry, for example, there are so many creators and influencers today. If you think those influencers and creators are all sitting in urban areas, that's not true. You can be sitting in the Northeast and have those local skills. In our case, if we have to leverage local knowledge of a particular destination, say in Jammu & Kashmir, we are definitely looking for a local person out there who understands the terrain really well, who understands the deep details about that state and destination. We would be very happy to work with them and promote that destination. A lot of this is going to bring inclusivity. Fundamentally, one area that we need to focus on, where the government, public sector, and private sector will have to do a lot more work, is creating awareness, changing the mindset, and making actual investment in skill development to be able to pick up new avenues of job opportunities.
Rajesh, while you were speaking about that, obviously there are no regional or national boundaries, then it struck me that in a way digital is quite inclusive because it knows no boundaries. It's like the world is one place. You talked about government and etc. What strikes me is that when the IT revolution happened in the country, when the IT software industry picked up, people used to say that happened because government was not there. That was an area where government had very little to do. That was maybe a way people used to describe it. But a lot has changed since then and the government is a great facilitator everywhere. But in digital as an area, do you think there are any specific things the government needs to do as a facilitator? Obviously creating awareness is one. Or in a manner where further growth happens in this particular area.
Actually, to be honest, government has been doing a lot already. The fact that the digitization drive in India is actually spearheaded from the top is doing a lot already. The focus on the startup community, starting the startup programs, the kind of visibility that has got, because I think it is understood at the top that the world is going to move towards this, and therefore we should absolutely be at the forefront of adopting technologies. If you really see the amount of work happening on expanding the digital infrastructure, go back and see 10 years ago, today every sector, every possible record is digitized, which wasn't the case. Even for income tax, legal records, real estate records, anything to do with financial services. I think there's a lot happening. Specifically on travel and tourism, if you look at airport traffic management, like DigiLocker or the Digi Yatra programs are game changers and they need to be absolutely scaled up. These are serious investments happening on creating digital infrastructure. UPI we spoke about, Aadhaar we spoke about. I would actually say we should not lose momentum. I don't think we need to do more new areas because the focus is there in all the right areas for the government to be able to give a strong push on this front. I just don't want any of the stakeholders to lose momentum, because the outlook for the Indian economy in general is really, really good. Look at the GDP growth rate as compared to the rest of the world, we are absolutely marching ahead and I don't see it slowing down. Therefore, what it needs right now is that we don't lose focus, we don't lose momentum. We just absolutely keep executing on our plans, make the investment in the right areas, don't cut back on investments because more investments will be required. Technology is one such area where it evolves really, really fast. At least in the private sector, we are very cognizant of it and we continue looking ahead at what is coming in the form of new technology and how we should embrace it and what kind of investments and resources are required. I would say just keep the momentum going. Don't lose the momentum, because one of the risks in the digital world is that if you lose the momentum, somebody else is sitting out there to grab that opportunity as well. In no time, the innovation can move somewhere else if we relax a little bit, lose the momentum and lose the focus. That risk we should avoid. Otherwise, I think we are on the right track and we're making all the right moves right now.
