ravi menon : foundational infrastructures for an inclusive digital economy opening remarks by mr ravi menon, managing director of the monetary authority of singapore, at the launch of report on foundational digital infrastructures, 26 april 2021. * * * the rapid adoption of digital solutions has enhanced the economic and social well - being of millions of people around the world. but many of these solutions are not interoperable. digital transactions are not seamless and we are not able to exploit the full efficiency benefits of digitalisation. it also means that the digital economy is not as inclusive as it should be. to create a truly efficient and inclusive digital economy, digitalisation must be end - toend. digital innovation is not just about the number of patents or the sophistication of the algorithms. we must put people at the heart of innovation, by creating end - to - end digital solutions that will purposefully improve their lives. we need foundational digital infrastructures – systems that allow different users, different solutions, and different devices to seamlessly interact with one another. foundational digital infrastructures will enable interoperable solutions and seamless digital services to reach more people and businesses, at lower cost and greater convenience. they will enable more pervasive digitalisation within and across economies. just as physical infrastructures like railroads helped to advance the industrial economy, digital infrastructures will spur the growth of the digital economy. the public and private sectors must come together to co - create common digital infrastructures, and avoid the pitfalls of isolated technology solutions - ‘ digital islands ’ and ‘ walled gardens ’. as a step in this direction, mas, together with the central banks of brunei, cambodia, ghana and kenya, and with support from mastercard, has published a report on ‘ foundational digital infrastructures for inclusive digital economies ’. there are four foundational digital infrastructures. first, digital identity. a digital identity establishes confidence and trust at both ends of the digital interaction. it enables access to the realm of public and private digital services across different sectors ; it promotes digital inclusion. a digital identity may be centralised or decentralised, provided by the public sector or private sector. how it is designed will depend on a country ’ s institutional and legal frameworks, digital literacy, and culture and attitudes towards issues such as privacy and security. 1 / 3 bis central bankers'speeches second, authorisation and consent. to foster public confidence that digital transactions are safe and secure, we need mechanisms for

unlocking new growth frontiers in the digital age 1 i. introduction this year ’ s nobel prize in physics celebrated the role of artificial intelligence ( ai ) in revolutionising the way we work and live. it is widely believed that ai and robotics will usher in a new wave of secular innovation, much like past breakthroughs in steam power and personal computers. 2 silently, new technologies are offering a way out of the cross currents of diverging macroeconomic and policy pathways, geopolitical tensions, geoeconomic fragmentation and climate change in which the global economy is transfixed. accordingly, these technologies are heralding a brighter future, arguably holding the key for many emerging and developing economies to escape the middle - income trap. 3 it is estimated that generative ai itself could increase global gdp by $ 7 - 10 trillion over the next three years. 4 large language models are estimated to increase the productivity levels of workers by 8 to 36 per cent. 5 inaugural address delivered by michael debabrata patra, deputy governor, reserve bank of india ( rbi ) at the depr conference on ‘ digital technology, productivity and economic growth in india ’ on november 13, 2024 at jaipur. valuable comments received from sakshi awasthy, sreerupa sengupta, ashish khobragade, himani sekhar, akshara awasthi, swastik yadav, rajib das and editorial help from vineet kumar srivastava are gratefully acknowledged. brynjolfsson, e., and mcafee, a. ( 2014 ). the second machine age : work, progress, and prosperity in a time of brilliant technologies. ww norton & company ; haldane, a. ( 2017 ). productivity puzzles. speech at the london school of economics. world bank. ( 2024 ). the middle - income trap. world development report. jp morgan. ( 2024 ). is generative ai a game changer? kalyani and hogan. ( 2024 ). ai and productivity growth : evidence from historical developments in other technologies. federal reserve bank of st. louis. over the past three decades, the digital revolution has been transforming the world, eclipsing all past revolutions. it is estimated that the global digital economy accounts for more than 15 per cent of global gdp 6. digital technologies are reshaping our lives through their impact on economic growth, employment, consumer welfare and living standards. these technologies are democratising