India’s Domestic Market For Computer Services To Grow Faster Than Exports: UN Report

India’s domestic market for computer services is expected to grow faster than their exports, fuelled by the government’s Digital India programme and the country's burgeoning startup environment, according to a United Nations report.

"The computer services industry in India is increasingly catering to the domestic market, leveraging expertise gained from exporting, while at the same time reducing an over-reliance on such exports," stated the report by the United Nations Conference on Trade and Development.

Noting that India ranked fourth in terms of growth in the share of the Information and Communication Technologies sector's value added in GDP between 2010 and 2017, the report said, "The domestic market for computer services in the country is forecast to grow faster than their exports, fuelled by the government's Digital India programme, its burgeoning start-up and venture capital scene and increased computer use by the MSMEs (Micro, Small and Medium Enterprises)."

The first-ever Digital Economy Report said the size of the global digital economy range from 4.5 to 15.5 percent of world GDP.

Regarding value added in the ICT sector, the U.S. and China together account for almost 40 percent of the world total.

In terms of value added, the U.S. has the world’s largest ICT sector at about $1 trillion - almost twice the size of the second largest, China.

The report further said that within the ICT sector, computer services are the largest component, with a 40 percent share of total value added.

The global computer services industry is dominated by the U.S. Its share of the sector's value added is almost as big as that of the combined total of the next nine largest economies, the report said.

On an individual economy basis, some economies saw growth in the share of the ICT sector's value added in their GDP between 2010 and 2017. Taiwan ranked first, owing to growth in ICT manufacturing. India ranked fourth, with growth driven mainly by computer services.

Ireland tops the list of countries in terms of value added in computer services as a share of GDP by quite a significant margin, reflecting the strong presence of regional offices of U.S. digital companies, followed by Sweden.

Unlike for other parts of the ICT sector for this indicator, only India among the developing countries features among the top 10.

India ranked ninth in e-commerce sales in 2017 with total sales of $400 billion or 15 percent as a share of GDP. Of the total sale, share of B2B was 91 percent at $369 billion.

The global employment in the ICT sector increased from 34 million in 2010 to 39 million in 2015, with computer services accounting for the largest share (38 percent).

Three developing and transition economies Brazil, India and Moldova employed over 50 percent of ICT sector employees in computer services, the report showed.

Some countries have been successful at developing an export industry in ICT services. Among the top exporters, the relative importance of ICT services in total services exports varies considerably. In Finland, India, Ireland and Israel, this share is higher than 25 percent. India, which ranked second, is the largest developing-country exporter of such services, almost a third of which are computer services.

China and India are leading in the creation of start-ups, accounting for 58 percent of the total for the region.

The extent to which Internet users are concerned about their privacy online varied from country to country. A 2019 survey on Internet security and trust conducted by the Centre for International Governance Innovation and Ipsos, in collaboration with UNCTAD and the Internet Society, found that 78 percent of Internet users in 25 economies were at least somewhat concerned about their privacy online.

Concerns were found to be the most widespread in Egypt, Hong Kong (China), India, Mexico and Nigeria, where that proportion was 90 percent or higher. By contrast, the lowest level of concern was noted in Kenya, at 44 percent.

As per the study, wealth and power in the digital sphere are increasingly being held by a small number of so-called "super platforms", comprising the seven global brands Microsoft, Apple, Amazon, Google, Facebook, Tencent and Alibaba.

Between them, these companies account for two-thirds of the total market value of the top 70 platforms: in China, WeChat, owned by Tencent, and AliPay, an Alibaba company, have captured virtually the entire Chinese mobile payment market between them.

Google accounts for some 90 percent of the global Internet search market, and Facebook is the top social media platform in more than 90 percent of countries. The reports shows that these companies are competing aggressively to stay on top, acquiring competitors, expanding into new services, lobbying policy-makers, and establishing strategic partnerships with leading multinationals in traditional sectors.

The UNCTAD warned that the dominance of these platforms is leading to a concentration and consolidation of digital value, rather than reducing inequalities between and within countries, with developing countries at the bottom of the pile.

The report called for a rethink, that will bring about a fairer distribution of the gains from the digital economy.