Unpacking the Concept of Digital Public Infrastructure and Its Importance for Global Development

Romina Bandura, Madeleine McLean and Sarosh Sultan

Source Link

Digital transformation is accelerating worldwide, and there are several emerging concepts and terms describing these new trends. One such new construct is digital public infrastructure (DPI). In September 2023, the UN secretary-general selected DPI as one of 12 high-impact initiatives with the potential to accelerate Sustainable Development Goals (SDGs), with commitments from 100 countries. As countries continue their digital transformation journeys, investing in DPI can become a crucial tool to improve overall well-being and quality of life.

Q1: What is DPI?

A1: DPI is the foundation of digitization and the enabling system that allows digital services to be provided to citizens and the private sector. The internet and GPS are some of the earliest examples of DPI. In that sense, DPI is nothing new, but all these existing systems have remained largely siloed. New forms of DPI can unlock innovation that crosses different sectors.

DPI takes on many different definitions, but all share the same core principles of trust, safety, interoperability, inclusion, and accessibility. The G20, in the 2023 Digital Economy Ministers Meeting Outcome document, recognizes DPI as “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 and are governed by applicable legal frameworks and enabling rules to drive development, inclusion, innovation, trust, and competition and respect human rights and fundamental freedoms.”

Governments, tech companies, NGOs, and businesses are the many stakeholders involved in the creation and delivery of DPI. In many cases, businesses take the lead in establishing the physical digital infrastructure (such as laying down fiber optic cables), which are subsequently adopted by governments for public use. Among countries, India has emerged as a global leader in the development of DPI, leveraging it to drive the widespread adoption of digital payments, data-sharing systems, and the growth of its e-commerce industry.

By providing a robust framework for digital services, DPI enables governments to deliver efficient and citizen-centric goods while ensuring security, privacy, and accessibility. For example, during the pandemic, the countries that had at least some elements of DPI were able to provide cash transfer programs to 51 percent of the population, compared to only 16 percent in countries without DPI.

Good DPI can also foster innovation, build trust between people and governments, and create data ownership for citizens. For example, a study by the United Nations Development Program (UNDP) and Dalberg revealed that by 2030, DPI could accelerate low- and middle-income countries’ combined GDP to $19.2 trillion, achieving this goal two to three years faster than otherwise possible. Its ability to connect sectors also makes it possible to capture spillover effects, ultimately advancing sustainable development in sectors not directly targeted by DPI.

Q2: What are the main components of DPI?

A2: Three components form the core of the digital public infrastructure: digital identity systems, electronic payment systems, and data exchange systems.

Building Blocks of DPI

Identity systems provide a way for individuals to identify who they are and authenticate themselves when accessing online public services, getting credit, or other services. Robust verification mechanisms, such as digital personal identification, civil registration, and digital business registries, are employed to ensure the accuracy and authenticity of digital identities. ID systems can be extended to typically marginalized and vulnerable groups as well.

Secure electronic payment systems enable citizens to make payments for services, pay fees, and submit taxes, and other financial transactions. These systems support multiple payment methods, such as digital transfers or government-to-person payments, and ensure accessibility and convenience for citizens. Examples include Pix in Brazil, created by Banco Central do Brasil (BCB), which allows users to transfer funds instantaneously. Similarly, the Unified Payment System (UPI) in India provides round-the-clock, instant fund transfers for multiple banks.

Data exchange and integration systems facilitate the sharing of information between individuals and the private and public sectors. They play a crucial role in breaking down data silos and promoting information sharing across government entities, as well as making access to information easier for individuals. Data exchanges include health information systems (e.g., to share health records), financial management systems (e.g., to pay suppliers, employees, and others) and information management systems. Examples include Estonia’s X-Road, an open-source software that links multiple information systems together and allows secure and efficient data sharing between various public and private sector organizations. Another example is the Data Sharing Policy and Data Architecture document created by the Ministry of Technology, Communication and Innovation of Mauritius to support greater interoperability of the country’s ICT ecosystem. These systems enable interoperability by establishing standardized protocols and data formats for exchanging data and documents securely. Instead of letting data sharing remain technically challenging, data exchange systems create standardized methods to gather, store, and share information.

While these three layers make up the basis of DPI, there is no need to stop there. Other layers can and should be added to ensure inclusion, trust, and competition.

Q3: What are some key examples of DPI?

A3:Good digital public infrastructure can provide opportunities for a wide range of services across sectors:

1. Public Services Delivery: DPI has shown its ability to streamline public service delivery to make it more efficient and deliver solutions to marginalized groups by expanding digital banking and payment platforms, automating processes, reducing paperwork, and enabling citizens to access services remotely without discrimination. For example, Togo was able to provide emergency relief payments to informal economy workers, whose work was shut down during the pandemic, by utilizing identification- and data sharing-based DPIs. Similarly, PromptPay allowed the government of Thailand to reach vulnerable groups during the pandemic by providing swift cash assistance to people linked to the payment system.
2. Entrepreneurship: Digital public infrastructure can enable private sector organizations to innovate faster and bring new services to market within communities to create jobs, stimulate the economy and drives competition, and foster inclusive growth. DPI can expand economic growth and innovation by supporting digital entrepreneurship and public-private collaborations as well as attract investments to foster economic opportunities. For example, Nepal worked with private organizations to create SipShala, an AI-enabled digital system, that matched migrant returnees in multiple municipalities with job opportunities according to their skill sets. The whole program was designed and deployed in only a matter of months thanks to the innovation of the private sector.
3. Healthcare: Digital public infrastructure can also improve access to healthcare by reducing hospital readmission rates, hospital-acquired infection cases, and unnecessary duplications in testing and prescriptions. DPI has also proven to be crucial for seamless information exchange among various healthcare organizations and government agencies. Moreover, it can create better access to services by streamlining processes, like national eligibility determinations, through integrated systems. For example, eHealth Africa, initially created to provide data-driven healthcare solutions, utilized DPI and worked with National Primary Health Care Development Agency in Nigeria to respond to the Covid-19 crisis. It facilitated the delivery of crucial vaccines through the Electronic Management of Immunization Data program. In 2022 alone, the program facilitated the delivery of 2 million antigens and helped over 1.1 million children receive immunizations.
4. Gender Equality: DPI can be an effective tool to address the global gender divide and enhance financial inclusion for women. India has successfully used the Unified Payment Interface (UPI) to increase women’s account ownership between 2015 and 2022, with 260 million women holding accounts. Pakistan, with the support of the World Bank, developed the Raast digital payment system to provide end-to-end digital payment and is enabling women in rural areas to directly access financial services and build small businesses.

Q4: What is “public” within DPI?

A4: DPI is regarded as public because it is designed to be accessible to everyone, based on a shared set of governance rules. DPI systems are often open source and can be freely shared, ensuring equal access for citizens, entrepreneurs, and consumers. Additionally, the modular components of DPI can function together and enable further developments. Essentially, similar to roads or electricity in the physical world, DPI aims to serve everyone and helps unlock a host of services.

To achieve this goal, DPI must be inclusive (provide equal and universal access), foundational (allow organizations to build upon it), interoperable (have open standards for anyone to use), and publicly accountable (be responsive to public governance mechanisms). Governments often play a critical role in regulating and providing these capabilities to prioritize accessibility, local control, and safeguards.

Q5: What is the relationship between DPI and digital public platforms? Are they the same thing?

A5: While often mistakenly used interchangeably, DPI and digital public platforms (DPP) are related concepts that play distinct roles in enabling digital governance and citizen-centric services. Together, DPI and DPP form the backbone of digital transformation initiatives undertaken by some governments worldwide. DPI sets the stage by providing the necessary infrastructure, security measures, data exchange capabilities, and analytics tools. DPP then leverages this infrastructure to create cohesive and citizen-centric platforms that enhance accessibility, streamline service delivery, and promote citizen engagement. Essentially, DPPs are the apps and services that are built using the foundations of the DPIs. For example, the Bharat Interface for Money payment application is a DPP that utilizes the underlying infrastructure of Unified Payments Interface DPI to support money transfers in India.

Q6: What are the main challenges to developing DPI?

A6: Despite its benefits, there are five particular challenge areas to operationalizing DPI:

1. Security: DPI, like all new technologies, must have robust security measures built into their structure to protect user data and privacy. Safeguards like encryption, authentication, and data protection policies need to be implemented and regularly updated to address evolving threats. The Data Protection Authority in Mauritius, is an example of countries taking steps to create greater security while developing DPI.
2. Interoperability: Achieving interoperability between different government departments, agencies, and systems can be complex, requiring standardized protocols and data formats. DPI should integrate with existing systems and services to provide a seamless user experience.
3. Inclusion: Citizens need to have access to different forms of technology and be able to use it. Many people may be unfamiliar with the available digital services or hesitant to trust them and unable to use them, and this requires added efforts to educate and promote their benefits.
4. Collaboration and Trust: Instead of fragmented and isolated units, government departments should foster transparent collaboration and consensus on a common, open, and interoperable digital framework. Establishing a nodal agency, such as a digital agency or ICT ministry, can help address accountability and ensure effective implementation.
5. Remediation: Like with most digital technology, DPI can also have potential negative or unintended consequences that are crucial to be addressed. An effective remediation framework can ensure accountability and foster trust in DPI. This will involve defining clear procedures for reporting issues, conducting investigations, and implementing corrective measures to mitigate harm.

The recent data breach of the Aadhaar ID system makes it clear that both good security and remediation processes are necessary. While India’s government respond by starting a formal inquiry in this case, it raises the question of creating more robust remediation systems and transparent mechanisms.

Q7: How is DPI governed?

A7: Although stakeholders recognize that good governance is critical for DPI, it is much harder to delineate what this entails. At the most basic level, good governance for DPI involves establishing comprehensive rules and standards under a sovereign jurisdiction, encompassing aspects such as procurement rules, interoperable data formats, civic engagement principles, and oversight mechanisms.

The governance layer serves as the foundation for the digital landscape and not only determines the success of digital initiatives, but also influences a nation's ability to engage with international partners. The governance framework has to be aligned with democratic principles and institutionalized mechanisms for public involvement. Simply put, good governance means that DPI is overseen by democratic institutions and relies on clear guidelines and rules for regulating, quite similar to how oversight for the electrical or transportation sector are governed. DPIs must not compromise individual rights, necessitating accountability mechanisms that are easily accessible to all and governed by a legal framework. It also defines the role of the private sector since DPI thrives on collaboration between the government and private sector investors. Establishing robust protection regulations, procurement guidelines, and financial reporting standards is instrumental in ensuring that private actors have confidence in the safeguarding of their interests and roles.