Although technological advancement in Nepal has not been as rapid as in the rest of the world, its contribution to achieving key economic benefits cannot be ignored. In less than two decades, Nepal has made great strides in reducing poverty and improving its health indicators. Migration and inflow of foreign direct investment (FDI) have helped Nepal achieve substantial technological growth.

Migration has followed an upward trend since 2000 with a large section of the population leaving the country for employment opportunities. Migration exposed young Nepalis to modern amenities and facilitated the use of digital technology. Likewise, remittance has played a crucial role in financing agro-based productivity. Similarly, FDI played an instrumental role in the transfer of technology from the advanced economies. In this regard, the technological assistance received from foreign countries in hydropower projects cannot go unnoticed.

Impact in daily lives

The last two decades have witnessed sweeping changes in telecommunication services across Nepal. The booming mobile phone market accompanied by innovation in internet technology has contributed much to growth. Moreover, an increase in the use of cable and fibre networks followed by the launch of 4G (fourth-generation) telecom service in 2017 has facilitated both connectivity and growth of the telecommunication sector. Furthermore, commercial operation of a Nepal-China optical fibre link has set a new milestone in linking modern Nepal with the rest of the world.

According to Nepal Telecommunication Authority (NTA), less than 30 percent of the population had access to the internet in 2010. Today, more than 62 percent of the population uses the internet either via a broadband connection or mobile data. The expansion of telecommunication services in a short span of time can be credited to the fast pace of technological growth.

The agriculture sector supports nearly 66 percent of the Nepali population and accounts for 27.6 percent of the gross domestic product (GDP). Although Nepal is yet to fully embrace technology-driven farming and irrigation methods, recent developments have proved that the adoption of modern technology can have an overarching effect on the functioning of the overall economy. One such example is the tunnel boring machine (TBM) being used at the Bheri Babai Diversion Multipurpose Project. The machine is capable of boring into mountains at the rate of 15-25 metres per day. Not only has the project gained impressive momentum in a short period of time, it has also helped generate employment and provided a boost to local service providers.

Once the project is completed, it is expected to make an indirect contribution of Rs3.1 billion to the economy, and a direct revenue contribution of Rs2.1 billion through electricity sales. Likewise, the use of technology in the agriculture sector including solar energy, treadle pump, drip irrigation, coffee pulper and zero till drill have significantly helped to improve the productivity and the quality of agro goods.

The use of technology has had widespread implications, from improving the health condition of people to strengthening the quality of the workforce. Advancements in medical diagnostic tools such as X-ray, CT scan and magnetic resonance imaging (MRI) have eased the diagnosis process of even the most complex diseases. Over a span of about 50 years, life expectancy has doubled, the crude death rate has fallen and the infant mortality rate has dropped more than sevenfold. It is evident that within the span of half a decade, we are a lot better off; and this has a lot to do, if not entirely, with technological progress.

Impact in entrepreneurship

The number of entrepreneurial businesses adapting e-technology in their business models, specifically in the service sector, has surged. Digital payment systems are increasingly being used even in rural areas of Nepal. Likewise, ride sharing services and food delivery services have allowed the urban population to share a bike ride and order food online. The examination management system has also been digitised both in public and private institutions, including academic institutions and the Civil Service Commission, marking a revolutionary transition from an orthodox service sector to a technologically advanced e-technology driven service sector. Today, the contribution of service sector to the GDP is more than 52 percent. Nepal is already a service sector driven economy, and the growth trend largely confirms the contribution of technology to the growth of Nepal’s service sector.

Even though technological enhancement has helped Nepal achieve robust economic development, it is still at the rudimentary stage of the technology-driven growth cycle. The way forward is to prioritise the research and development sector and ensure that Nepal is skill-ready to adopt even the most sophisticated innovations such as 3D printing and artificial intelligence. In addition, investments will be crucial to realise technological growth. Hence, in order to achieve the desired economic goals, Nepal needs to concentrate on attracting investments in technology.

Gautam is a fellow at the Nepal Economic Forum