D.Enkhbat: The problem isn’t a technology, it’s the old-fashioned system management

The Mongolian Economy spoke with D.Enkhbat, a founder of Karakorum Digital Academy, about the technological development and digitalization process in Mongolia.

-How would you describe the past progress of digitalization? For example, were digital services focused on reducing administrative costs rather than costs incurred by citizens?

-In terms of e-governance initiatives, we were quite active. The government established the National Data Center and successfully digitalized public services. However, in my opinion, for the last three or four years, it has been inactive.

Digitalization is not merely automation of traditional work and reduction of costs. If you receive wings, you must fly like a bird instead of running like terrestrial animals with useless wings. To put it simply, the digital transition is not a technological problem. It is about taking organizations, businesses, and industries that use information technology to a whole new level. The digital transition is not automation or computerization. In the West, a digital transformation means that a rebirth of a company in the modern digital marketplace. Amazon has not only automated shopping or connected stores to the Internet but it completely disrupted the market. Digital transitions change the activities and goals of the organizations and institutions behind them, not just computer and information technology. Therefore, digital transformation is not just for IT and its respective professionals.

-In the past the e-governance initiative has been proposed several times but failed to implement. What steps need to be taken to ensure the continuity and successful implementation of the “Digital Mongolia” program this time?

-If you look at Estonia from outside and imitate it, you will not succeed. The distribution of power and authority has changed as well. For instance, suppose you select a lower-level committee chair. We have ten people who know the Khoroo’s chairman, and hundreds of Khoroo residents who do not know what happened. To change this, all residents can vote on their mobile phones. Therefore, we need to change our perspectives and learn how to carry out a political reform from Estonia.

The best practices of Estonia and Singapore are useless unless we set a clear goal. The transition will only happen if we start to talk about changing our orthodox systems that exist in all levels. The term “digital transition” is misunderstood due to the fact that it has the word “digital” in it.

Basically, the secret of the digital transition is that new technologies give an opportunity to change the core institutions and systems. Not only transformation of public services but also many other functions of the state, or in short, a government reform is necessary in Mongolia.

-Even if it fails, it is important to take an initiative in some way. What do you think about this?

-Of course, it is very important. The main challenge is how to hold a national or a large-scale discussion on government reforms with the political parties, parliaments, and president. As we are failing to do so, someone gets elected, changes previous decisions, and talks about something else. This has gone on for the past 30 years. It, indeed, surprises Estonians. Almost a dozen of our representatives have visited Estonia to learn about Estonian e-governance.

In order to implement national reforms, it is necessary to comprehensively assess the legal environment, the role, and the structure of the state. Initiatives are very important in this task. I have no choice but to support it. It’s a big deal that we understand the need for digital transition, especially at the ministerial level. The most important part is to reach agreements at the state, administrative, legislative, judicial and presidential levels.

-The private sector is very active in the information technology sector. How has this involvement of the private sector affected the current development of digitization in Mongolia?

-The private sector has been leading for the last 30 years. The information technology sector is mostly led by the private sector initiatives. Particularly, banks and mobile phone operators are leading in this sector. That means we can solve technological problems relatively quickly. In addition, the services provided by the private sector are up-to date and tailored to your business and capacities. Therefore, the key question is how to turn private technology into a force for national development, and how to include more than 100,000 companies, three million people, education, health, and transportation sector. The alternative would be to turn it into an element of development in all sectors. If it was a symphony, we would need a common note to play.

One of the problems of the private sector is that everyone sings their own song. Now it is important, however, that what type of music will three million Mongolians sing, what symphony will be played, and how digitalization be utilized in national development policies. This is the function of the state we have been talking about. Management needs to exercise leadership over this link. The miracle of Estonia is that informatization was a political decision.

The purpose of digital transition was to increase competitiveness, differentiate itself from other countries, and make it a development tool.

-Today, technology is said to determine our path to development. How do you see this progress?

-In the digital world, someone can be in New York, Africa or Mongolia but it does not matter. Therefore, in this new world, we need to think of a new development model. A new field has arisen. As for Estonia, they did not rely on coal like us and did not choose the old path. They put their bet on digitalization. Countries, businesses, and schools are discussing digitalization at all levels. So my position is the same. If Mongolia bets on digitalization as soon as possible, we will have the same opportunities as others. In this market, everything is new and everything is just beginning. Yes, if Estonia can do it, so can we. However, after 10 or 20 years, this market will become increasingly difficult for new players.

-Does the concept of development change over time?

-First, you need to understand development correctly. Many people do not distinguish between development and growth. Growth is the expansion of something that already exists. However, development means going to the next level and becoming more complete. It is very important to make money by selling coal today. It is perhaps extremely important. However, no matter how large the industry, it will not evolve. Thirty years from now, this industry will disappear.

The key question is how to turn this coal, the money we earn, into development. Mining is undoubtedly important, but even if you do not develop what you find, you will be leaving the country with lots of plastics and empty holes. In other words, today we need to look at mining and beyond it.

– We have been talking for many years about getting rid of our dependence on mining. So will digitalization be another opportunity to diversify the economy?

-This is a great opportunity. However, let’s not forget one thing. It is useless to simply digitalize the old system without making any changes. Bullock cart does not need to be computerized but it needs to be completely transformed into a car.

Let’s talk about the tourism industry. Airbnb is a brand new model. It does not possess any rooms or hotels, but it is the largest hotel company in the world. This company is making tourism completely different. All perspectives, such as management and marketing are changing. In the same way, we must change this sector, not computerize tourism in the old way.

Digitalization connects everything that was not previously connected. Secondly, it makes everyone smarter. In other words, a lot of things are done by computers and technology itself. Thirdly, it is democratizing. Development is not led by one ministry or one large company, but by equal participation of all. In fourth, the potential of information technology is important as it keeps pace with the world. In short, if we want to make the digital transition and join the digital world, we need to change the management and structure of the old system.

The main problem we are facing is not technology, but outdated thinking, methods and outdated management systems at all levels.

-What is the current level of digitalization in our country compared to other countries?

-We have lost initiative and speed due to the weak development of Mongolia’s information technology eco-environment. If we want to start a company in Mongolia, there are no investors and no legal environment. Therefore, I would not assess the development of this sector as good or bad. It’s just that we can do it. So this is a very big issue. Another problem is that we do not have professional staff. The universities have largely reduced enrollment in information technology than before. The well-trained professionals simply went abroad.

As someone who has run an IT company, finding skilled employees has been a headache. In addition, the government delegates the IT projects to foreign companies. This is a wrong policy and a big mistake. Technology can be imported. However, this should be done by the private company in charge of the project, not by government ministries and officials themselves. When the contract expires, the foreigners will leave. However, local companies are doing what they can and can’t do. That’s why our companies and specialists are working hard. However, we do not have the will to combine all this and achieve great goals, the rules, and the environment of the joint game.

-How will your current initiatives be implemented in line with the government’s digital transition policy? Will you contribute to this work?

-Business.mn is part of our mission. It is a project that aims to connect 100,000 Mongolian companies and create a meeting point. Leaders do everything first. Nonetheless, the director of a private company doesn’t do as I say, he does it if he wants to. My job is not to persuade him to do it, but to tell him why he needs it, why it’s digital, why everyone is connected and diversified. Therefore first, to connect, second, to understand the digital possibilities, and third, to organize cooperation is the goal. That’s why we are launching magazines, podcasts, websites, and “digital karakorum”. This is how we see the digital transition in the private sector.

However, the government is creating its information system as part of the digital transition. These are two sides of the same coin. When D.Byambasuren was the Prime Minister, I was the Deputy Minister in charge of digitalization at the Ministry of National Development. At that time, digitalization was proposed as a development policy in the government meetings. In the past, I have visited several countries, including Singapore, Malaysia, South Korea, Estonia, and New Zealand for a research purpose. It is understood that the main problem of e-government is not technology but system reform. In general, depending on the political parties and the electoral system, I think we should do our best to reach an agreement with the people in the private sector when all government work is unstable and difficult.

If the government works together with the private sector and sets a big national goal, of course, we will continue our contribution. n