The second paper examines the evolving relationship between Digital Public Infrastructure (DPI) and private sector innovation, addressing a critical gap in existing research that has largely focused on public sector outcomes. Using cross-country evidence from mature DPI ecosystems such as India, Brazil, and Estonia, it explores how foundational layers of identity, payments, and data sharing can catalyse new markets and business models when supported by strong governance and institutional design. The paper situates DPI within the broader innovation typology framework, positioning it as a “really new” innovation that lies between incremental (SaaS) and radical (GPT) technologies. Through this lens, it argues that DPI’s openness and interoperability enable a scale and pace of innovation inaccessible to proprietary digital models.

By foregrounding the institutional and governance dimensions of DPI, the paper reframes it not merely as a technological artefact but as a new model of public digital infrastructure provisioning. It demonstrates that DPI’s transformative potential depends less on technological novelty and more on the governance architectures that ensure openness, inclusion, and interoperability. These choices determine whether DPI evolves as a public good that fosters widespread innovation or merely replicates the market barriers of proprietary systems. The analysis thus offers both a conceptual framework and policy insight for governments and development partners seeking to leverage DPI for inclusive economic growth and private sector dynamism.

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