The Future of Digital Public Infrastructure: Paving the Way for Rapid Global Transformation

India's 2023 G20 presidency put a global spotlight on Digital Public Infrastructure (DPI). The G20 discussions led to a consensus on a framework for DPI, combining technology, governance, and community involvement. This has spurred global interest in DPI, with initiatives like the UN's High Impact Initiative and the 50-in-5 campaign aiming to accelerate DPI adoption in numerous countries

What is DPI and why it is inevitable to package it as societal commodity ?.

There are essentially two ways to develop digital assets in any country. The first is the siloed digitization approach. This method involves engaging various vendors to build and operate digital systems, digitizing one business process at a time with full-stack solutions. Each solution builder creates all necessary components and capabilities, leading to expensive and poorly designed custom solutions. This approach reduces reusability, interoperability, evolvability, and extendibility while incurring significant costs. Countries aiming to be fiscally prudent should leverage shared digital infrastructure to drive reuse, efficiency, and interoperability, avoiding the repeated creation of full-stack solutions. Full-stack solutions often result in proprietary systems, which are not ideal for critical digital infrastructure.

The second method, the Digital Public Infrastructure (DPI) approach, involves creating shared technology infrastructure building blocks rather than complete solutions. Different DPI building blocks can be combined, reused, and leveraged when building various solutions, avoiding the need to rebuild from scratch each time. DPIs, by nature, interoperate with each other, allowing for the creation of interconnected solutions by both public and private ecosystems. They facilitate the combination of infrastructure layers and assets in innovative ways during crises or when new requirements emerge. Essentially, DPIs are reusable building blocks for various solutions developed by the ecosystem.

DPI can be likened to railroads—the core infrastructure on which a diverse set of transportation solutions are built by both public and private enterprises. Thus, DPI establishes core technology infrastructure along with a well-defined governance model, enabling both government and private innovators to create novel solutions as needs develop. The private sector plays a crucial role, building diverse citizen- and consumer-facing applications on top of a core digital infrastructure.

Take, for instance, the case of instant payments through the Unified Payments Interface (UPI) in India. The core framework for digital payment infrastructure was established with interoperable protocols and governance mechanisms developed by the National Payments Corporation of India (NPCI). Google’s GPay, WhatsApp-based payments, Walmart-owned PhonePe, and others have built technology solutions for consumers and businesses on this core infrastructure. This design allows the private sector to innovate without creating proprietary, closed-loop systems, fostering fair market competition and avoiding vendor lock-in of critical national infrastructure.

Similarly, to successfully deploy a direct benefit transfer framework (government-to-people payments) at scale, a country typically needs an identification system, interoperable digital payments, an account mapper, and digital credentialing. With these components in place, countries like India created a direct benefit transfer system for pandemic assistance and a vaccination platform within days after the COVID-19 outbreak, with minimal financial commitment.

Under India’s presidency of the G20, outcome documents described DPI as a “set of shared digital systems that should be secure and interoperable, and can be built on open standards and specifications to deliver and provide equitable access to public and/or private services at societal scale.”

Approaches in building DPI for impact

1) Traditional Custom Build (TCB) Model:

• Process: This model entails building each layer of the DPI from scratch, customizing it to the specific requirements and context of the country. It often involves engaging with various vendors and consultants to define specifications, design requests for proposals (RFPs), select vendors, and implement the technology infrastructure. This process can be lengthy, taking one to three years, and requires substantial upfront investment before even starting a pilot project.
• Customization: The TCB model allows for a high degree of customization, as individual building blocks can be created according to the country's exact specifications and combined in unique ways to address specific use cases.

• Suitability: This model is typically better suited for countries with large economies, a high degree of domestic technology talent and capacity, and a strong desire for flexibility in designing solutions.
• Challenges: The TCB model can be complex, time-consuming, and expensive. It requires significant political will, complex procurement processes, and substantial investment in building local technical and implementation capacity. The high degree of customization can also lead to longer timelines and increased risks. Pricing model is Capex oriented.

2) DPI as a Service (DaaS) Model:

• Process: This model offers essential DPI building blocks as pre-packaged, configurable components that are cloud-ready and can be deployed with minimal effort. Countries can quickly configure and launch DPI pilots without lengthy procurement and implementation cycles.
• Suitability: This model is particularly suitable for countries with smaller populations, limited technical capabilities, or those seeking a faster and more cost-effective way to deploy DPI. It addresses challenges related to capital expenditure, procurement cycles, capacity building, and project implementation. Pricing gets shifted from Capex to Opex.
• Benefits: The DaaS model offers several advantages, including rapid deployment, cost-effectiveness, accessibility, flexibility, data ownership and sovereignty, scalability, reduced risk, and the use of open-source technology. It allows countries to quickly realize the benefits of DPI without the complexities and challenges associated with the traditional custom build approach.
• Cloud Deployment: The DaaS model leverages cloud technology, allowing countries to quickly configure and launch DPI pilots without the need for extensive infrastructure setup. This approach reduces the reliance on local technical capabilities and accelerates the implementation process.

• Open-Source and Customizable: The DaaS model is based on open-source assets, allowing countries to retain control and customize the DPI to their specific needs. It strikes a balance between standardization and flexibility, enabling countries to adapt the DPI to their unique context while benefiting from pre-built components.
• Alignment with SDGs: The DaaS model can be instrumental in advancing the Sustainable Development Goals (SDGs) by providing a faster and more accessible way to deploy essential digital infrastructure. This can contribute to various goals, such as reducing poverty, improving healthcare, and promoting financial inclusion.

DaaS - the catalyst for a new market ecosystem for accelerated transformation

The future of DPI is likely to see a shift towards the DaaS model, which could significantly accelerate global DPI adoption. This model is expected to be particularly beneficial for countries with smaller populations or limited resources, as it offers a more accessible and cost-effective way to deploy essential digital infrastructure. The potential of DPI to advance the Sustainable Development Goals (SDGs) by promoting financial inclusion, improving healthcare, and reducing poverty is significant. By making DPI more accessible and affordable, the DaaS model could play a crucial role in driving global development and achieving these goals. Additionally, a new market ecosystem is emerging for DPI deployment, with consultants, cloud providers, and funding agencies exploring innovative solutions for quicker, safer, and more responsible DPI adoption. This suggests that the future of DPI will likely involve increased collaboration and innovation across various sectors, further accelerating its global impact.

For example, the DaaS model could enable a country with a small population and limited technical resources to quickly implement a digital identification system, facilitating access to financial services, healthcare, and government benefits for its citizens. This could lead to increased financial inclusion, improved health outcomes, and reduced poverty, contributing to several SDGs. Furthermore, the DaaS model's emphasis on data ownership and sovereignty could empower countries to leverage their data for national development while ensuring privacy and security.

Reference : The Future of Digital Public Infrastructure: A Thesis for Rapid Global Adoption by Pramod Varma, Rahul Matthan, Rudra Chaudhuri, and C. V. Madhukar