25Sep2023

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Tag: Gigeconomy

The Explainer - NIPoRe Blog

Increasing Gender Diversity in Nepal’s Tech Sector

ANKUR Shrestha

Historically, women’s participation in the tech sector has been remarkably low due to the patriarchal classification of jobs. As a consequence, it led societies to believe that men automatically belong to the fields such as IT while leaving a very narrow space for women. This has caused only a few women to study and subsequently enter the tech sector.

Nevertheless, this is changing, as it rightly should. According to Deloitte Global, the tech industry is making steady progress in shrinking its gender gap. In 2019, overall female representation in large global technology firms was 30.8 percent. Deloitte estimated that women’s share in the overall global tech workforce increased by 6.9 percent from 2019 to 2022. Public commitments by large tech companies to improve gender diversity also aided this increase. Intel, for example, aims to double the number of women and underrepresented minorities in senior leadership roles by 2030. Similarly, HP pledged to reach 50 percent gender equality in roles at the director level and above by 2030.

In Nepal, we see a similar upsurge. According to Nepal’s 2011 census, only 1,117 females studied computing while the number increased to 11,078 in 2021. This shows a monumental increase of about 892 percent in female students in the tech sector during the ten-year period. It also beats the overall increase in students studying computing which amounts to more than 668 percent which is significant by itself as well.

Conversations with women professionals working in Nepal’s tech sector show that one major reason for this uptick is that IT has set itself as an industry better suited for women workers. However, our societal structure has for long had restrictions for women to work (especially after marriage), restricts economic freedom, deems late office working hours as unsafe, treats periods as taboo, considers men as primary breadwinners, and puts less value on women workers. The IT sector provides a workaround for many of these societal issues. Asmita Bajracharya, Product Manager at Innovate Tech says that work in the IT sector can usually be done from home and has flexible work timings, project-based pay, space for freelance work, and a relatively higher pay scale compared to other industries. All these, therefore, she believes make the sector one of the best for working women in Nepal. 

However, the IT sector is also rife with issues depending on which company you analyse or whom you talk to. IT startups are particularly problematic while established companies usually have stringent policies in place. However, we see such discrimination usually persist in smaller and newer companies even within the IT sector. Additionally, smaller companies generally have issues such as longer working hours, and no set leave policies. Nepal’s Labour Act 2017, Chapter 7 Section 33, also requires arrangements for transportation to and from the workplace in employing a female where the working hours begin after sunset or before sunrise. Advocate Sadikshya Maharjan says that this particular section, while well-intentioned, can also cause smaller companies to discriminate in hiring women as they are not able to provide these services.

Another area of the Labor Act, Chapter 2 Section 7, prohibits discrimination in remuneration for equal work. However, unequal pay issues continue to persist in the sector. IT companies are usually structured around payment through projects. Therefore, discrimination while assigning job responsibilities leads to a vicious cycle where companies assign lesser-paying projects to women, leading to lower performances in performance reviews. This subsequently leads to less pay and lower chances of promotion resulting in more incidences of discrimination. Ojaswi Poudel, currently a Software Engineer at Cotiviti, says that she faced such blatant discrimination in one of her previous workplaces. However, she believes having women in senior positions in the company can help break this cycle. She also sees the need for senior women mentors so that younger women have someone to look up to and gain more confidence in this field. She says she does not face such issues in her current company which is more structured, has proper mentorship, and has clear payment policies.

Sadhana Gurung shares similar advantages in her company. Gurung who works at Leapfrog Technology currently as a Software Engineer, QA has proper mentorship models, flexible timings, as well as opportunities for growth in her company. This might also be one of the reasons why it is easier to get more motivation from peers and have women-friendly policies at the office. She also notes how despite fewer women currently working in IT, even clients and senior management are happy to see women workers, are welcoming, and provide proper career guidance.

While it would be a generalisation to say that there is very less discrimination based on only three experiences, trends do point towards more inclusion and provisions of a more equitable working environment for women in tech. With more women choosing the tech sector for their studies and work, and established companies having non-discriminatory policies, the tech sector in Nepal seems to be slightly ahead of the curb than other workplaces in Nepal. A study by McKinsey research showed that the most diverse companies are 48 percent more likely to outperform the least gender-diverse companies. It is then to the benefit of everyone to create a more gender-diverse workplace. There is more to still do to achieve gender parity but the tech sector in Nepal definitely seems to be heading in the right direction.

This blog is a part of NIPoRe’s blog series on Women’s History Month 2023.

The Explainer - NIPoRe Blog

Digitalization of Nepal – Few Policies and Possible Challenges

Pradhyumna Wagle

Digitalization has been at the forefront of development in the last 50 years. It has allowed developing countries to access information and resources like never before. Often, it is suggested that digitalization would help underdeveloped economies to skip the industrial development phase and quickly catch up with the developed economies, a process known as leapfrogging. Increased internet access and rapid transformation of bricks and mortar to digital form after the mid-20th century has laid out a base for the so-called Fourth Industrial Revolution (4IR). A World Economic Forum report suggests that 4IR will be a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. It cannot be emphasized more on how quickly developing countries need to prioritize digitalization and thrive through the 4IR. On the other hand, there has never been a time in history where access to information and knowledge has been so available. Therefore, it is a perfect opportunity for small economies to absorb as much resources as they can and recognize digital transformation as the way forward.

Nepal’s inability to compete with other developing countries in industrial development, especially manufacturing, can be primarily linked to geographical structure and human resource, among others. While digital infrastructure would need geographical convenience at installation, connectivity and evolution do not. Nepal is in a good position to exploit the digital resources that are available, and the ones it can generate from within, like electricity, to climb up the development ladder. The base for digital infrastructure, electricity, can be accessed by 94 percent of the population and Nepal Electricity Authority plans to achieve 100 percent electricity access by 2024. Internet penetration is at an all time high with 99 percent of the population having access to mobile broadband connection. It is safe to say that the Government of Nepal has realized the importance of digitalization and recognized it as the future. Hence, it published the Digital Nepal Framework 2019 (DNF) which includes short-, medium-, and long-term plans to reshape Nepal’s economic and social structure. As the government plans to focus on transforming different sectors to digital infrastructure, I discuss a few specific policies, possible challenges and what we can learn from other developing countries.

Adoption of technology

While emerging technologies are readily available, there needs to be proper policies that welcome new technology and create a suitable environment for it to grow. A study by Samuel A. Ejiaku concludes that most developing countries have ineffective information technology policies, and this hinders the proper growth and application of the IT sector. Interestingly, Ejikau points out that developed economies also have not contributed much to assist developing economies. This is because exporting technology would need to be modified to suit the environment and culture of the target economy. This means there must not only be policies that make importing of technology smooth, but also emphasizes on the need of skillful people that can make the adoption of technology suitable to that location.

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Government of Nepal has identified digital foundation as one of the major sectors that needs to be addressed. Increasing quality digital access is the main goal of laying out the digital foundation. The government has recognized poor quality and connection strength, and digital literacy as the main problems that occlude the digitalization process. Hence, DNF includes plans to train all government employees using a proposed e-learning platform that is publicly available. It is expected that the training program would help increase digital literacy and the learning platform would generate awareness in the public as well as maintain the supply of digital trainers. The former makes sense, but the inclusion of the latter is vague. It is not clear if the platform would be used in schools or only the government agencies, but unless there are incentives to learn and teach, it would be difficult to consistently find digital trainers.  Also, there is a plan to establish ‘knowledge-parks’ in special economic zones, but this has only been linked to economic growth. Skillful manpower is one of the vital aspects of digitalization, but DNF does not include priority plans to increase technology-friendly workers in all aspects. The government should focus on changing the academic structure to push institutions to use available technology. This would help make the workforce ready and well equipped with technological knowledge. Training programs could then be used to focus on a certain technology.  

Government Services

DNF has focused on changing government agencies’ structure: from paper to digital. This includes structural transformation from within the agency: recordkeeping, budgeting, and cybersecurity as well as in the services provided: public service applications, document processing and digital signatures in national identity cards. This is promising and has already come to implementation in many offices. But there is a serious lack of maintenance among the installed technologies. Lots of public service offices showcase themselves as being ‘online accessible’ but people need to show up in person and that violates the entire purpose of making the system online. A study in Ghana about the barriers to digitalization of government budgeting in developing countries identifies outdated laws and culture of paper document flows as the institutional barriers to digitalization in public service sectors. Literature in this sector identifies culture and structures of government agencies, pre-established hierarchical structures within the organization, operational divisions and politics and resistance to innovation as the main barriers to digitalization. All of these can be associated with Government of Nepal’s offices. Hence, it is important for the government to think about tackling these issues alongside the implementation of digital platforms. Most of the plans regarding within office digital transformation listed in the DNF are longer-term and those about public services are short term. I believe that this should be the opposite. Making the internal systems secure, stable, and efficient would then pave the way for service-oriented technologies like payment systems, online registrations, and administrative works. So, there is a dire need to identify what plans are short, medium, and longer term to make the digitalization process smoother. 

Small and medium enterprises

With the wave of digitalization, all forms of market transform structurally. From production to sales, every aspect of the economy is affected by digitalization. While big organizations and manufacturers have early access to new technology using their power and accessibility, the government must ensure that small and medium enterprises are well placed to take advantage of digitalization. New technology provides small and medium enterprises comparative advantages especially in local markets and that is very important for the economy. Within the execution plan of the DNF, most plans focus on the agro-economic sector like training farmers about digital platforms and pre-season education, quality check of agricultural equipment using technology, and smart irrigation facilities. There are a few short-term plans about facilitating e-commerce services, digital payment systems and development of mobile apps for transportation and healthcare. However, all these plans require governmental support and political stability: which is missing in Nepal. A similar study about digitalization of small and medium enterprises in Yemen, whose numbers regarding digital penetration is similar to that of Nepal, finds that economic and political instability, and lack of support for small and medium enterprises to thrive, as the major challenges. What the government could do is learn from developing countries that have undergone digital transformation like Rwanda. Rwandan government is well known for creating an environment for small and medium enterprises to adopt technology and thrive, mainly through innovation support. Government of Nepal’s plans are good in a sense that they want small and medium enterprises to grow, there is no specific plan that promotes innovation. Small and medium enterprises excel mainly because of the uniqueness of their products and services and innovation is necessary for them to survive. The government should aim to remove bottlenecks in the creation of new enterprises and even if they fail, provide support to regrow through improved digital access and minimizing administrative hurdles, mainly in technological import, export, and deployment.  

Concluding Remarks

Digital access is penetrating every aspect of society today. When it comes to digital transformation, it is not if but when. The most important step developing countries like Nepal could take is to open all possible pathways to welcome and integrate digitalization into the society as smoothly and quickly as possible. In terms of time, the more time it takes for an economy to digitalize, the loss in potential to develop is exponentially worse. Therefore, it is high time Government of Nepal takes necessary progressive steps towards digitalization.

OP-EDs and Columns

Regulating Online Businesses

ANKUR Shrestha

The opinion piece originally appeared in the 2022 September Issue of New Business Age Magazine. Please read the original article here.

The shift towards online businesses has not been new in Nepal. The COVID-19 pandemic especially helped increase this movement while social media marketing had already been a common thing even before the pandemic. The pandemic has forced even traditional businesses to go online as they searched for new ways to reach consumers. Moreover, online businesses can be set up at a relatively low or no cost, and it is easier to market using social media. Therefore, online businesses became attractive to new entrepreneurs using social media to sell retail goods or services. Most of these new businesses, however, were not registered.

The problems in business registration are, however, not new. According to the latest available National Economic Census 2018, almost half the business establishments are unregistered. Two out of three businesses operated by a single person are not registered.

Then why are we seeing a large number of unregulated establishments, especially small-scale ones? There are various reasons. First, it is a strenuous task to register a business in Nepal. The World Bank ranks Nepal at 94th overall in its Doing Business Rankings in 2020, but 135th in starting a business and 151st in enforcing contracts. These are critical for small businesses.

Secondly, the government has not been able to offer substantial benefits (or impose costs) to warrant registering a business. Regular processes that need to be easy and fast, such as registering a business and paying taxes, come with cumbersome bureaucratic hassles without offering any particular benefits. Additionally, the government’s ability to impose contracts in case of any issues between contracting parties is slow. The people then see no reason to seek help from the government. On the flip side, most unregistered businesses do not face any consequences for not registering.

The third reason is that government regulation is slow to catch up, especially for online businesses. For example, when ride-sharing services like Tootle and Pathao started their services in Nepal, they had no exact regulations to operate under. Riders were arrested by the police as existing laws did not allow private vehicles to provide ride services. But, protests from consumers as well as service providers have forced the government to allow ride-sharing even in the absence of legal provision even though it has been more than five years since these services came into operation.

Even registered small businesses have been known to avoid paying taxes by showing a negative balance sheet. Customers have also contributed to the informal economy by not necessarily demanding VAT or PAN bills from the businesses. This has encouraged newly formed online businesses to operate without staying registered.

A glimpse of a genuinely free market economy in the country can, however, be seen. Albeit informal, the online market has been known to be relatively easier to purchase from, allowing consumers to compare prices across different sellers and choose one that suits them while paying relatively lower costs, all from the comfort of their homes. Sellers are compelled to sell better goods as setting up shops becomes easier through online mediums, and comments and ratings (reviews) in online mediums are viewed by a large number of potential future consumers. These act as incentives for sellers to improve customer service, sell better goods, try and create their niche, and perform better overall.

The government has remained a mute spectator, allowing sellers to provide goods cheaper to consumers while maximising profits. This type of informal arrangement is not covered by the government protection mechanisms for consumer safety. Of late, however, the government has tried to rectify this and drafted an E-commerce Bill intending to create, regulate, and facilitate online trade in Nepal. The first of its kind bill dedicated to e-commerce focuses on consumer protection. The question of allowing a truly free market without government intervention remains. The government needs to do more for both online businesses and consumers to remove the hassles in business registrations and taxes. While the E-commerce Bill is a step in the right direction, it has still not gone through the parliament.

The government’s slow and unresponsive nature, procedural challenges to reduce steps in business registration, and the high tax slabs will always hinder businesses from entering the formal fold of the economy. Questions of the role of government in only acting as an insurer of contracts rather than directly intervening in the market will also remain. Regardless of the arguments, the registration of businesses (online or otherwise) will help the government plan better and invest in easier access to resources for both sellers and consumers.