To ride the next wave of innovation, India needs its own strategy. Its agenda for 2018 should be to leverage the hundreds of millions it brought online in recent years and the 1,500 million GB of monthly data consumption that now powers a Digital India.
China’s National Development and Reform Commission recently announced subsidies to 56 artificial intelligence and robotics companies in line with its goal to become an “innovation nation” by 2020. Over the past three decades, Beijing has sought and aggressively pursued technology-led global dominance.
If high-impact Chinese academic publications formed 1% of the top Scopus citations in 1997, today they are at 20%. Once synonymous with knock-off goods, China now inspires Silicon Valley to mimic even its on-demand bike rental services. But its digital economy is a testament to well-worn 20th century statecraft. Protectionism has meant Chinese payment services like TenPay and AliPay have over 800 million users and a combined market share of nearly 90%. The microblogging site Sina Weibo has 500 million Chinese users — more than Twitter’s global user base. The story repeats itself in search (Baidu), local ecommerce (Alibaba, JD.com), local commutes (Didi Dache, Kaundi Dache) and travel and accommodation (Ctrip, Tujia). Notables at the receiving end include Google, Twitter, Walmart, Amazon, Wiki, Facebook, Netflix, YouTube, Uber and Airbnb.
In 1803, French economist Jean-Baptiste Say said supply creates its own demand. Beijing has vindicated his theories. Tapping into its vast internet user base, China created services that cater to its citizens’ needs, concurrently generating massive data to fuel innovation.
To ride the next wave of innovation, India needs its own strategy. Its agenda for 2018 should be to leverage the hundreds of millions it brought online in recent years and the 1,500 million GB of monthly data consumption that now powers a Digital India.
Data is the new oil; but our aim should be wealth creation beyond mere ancillary benefits of this ‘oil’, such as affordable connectivity. We must reconsider the ecosystem of data extraction from India, not merely figure out how its benefits can trickle down to citizens.
India will enter the ten-trillion-dollar club as the first economy to mature during the Fourth Industrial Revolution (4IR). The first three waves — led by Britain, the US and finally China — featured wealth creation within one’s own geographies, aided by global resources and labour. This focus on local prosperity and capacity won’t change. What will be unique to the Indian story, however, is its regulatory ecosystem around data — the 4IR’s raw material.
Global trading rules, which China stayed away from till the 21st century, require India to be expansive in its digital integration and in traditional offline trade. But as the Washington Consensus develops fatigue, India must infuse energy into a new globalisation project. India should offer its own developmental model that addresses key concerns on cross-border data transfer — one promoting the free flow of information globally while ensuring local value creation from data.
The Aadhaar database, among the largest global public repositories of information, can jump-start a new wave of startups and services that rely on authentication. The challenge will be in launching Indian innovation into the outside world. WhatsApp’s integration with the Unified Payments Interface this year suggests that the world is indeed ready to welcome first-rate Indian products. WhatsApp integration will drive the creation and adoption of UPI-based applications and similar products based around Aadhaar-enabled systems. Still, the story is only half-complete. UPI may have become the backbone of payments innovation but real success will come when an Indian platform can emerge on the scale of a WhatsApp or Sina Weibo.
How do we create global Indian technology giants? It isn’t just about access to data, or obsessing over where it’s located. What we need is data refineries, not data wells — an Indian tech ecosystem that doesn’t only create and extract data, but also transforms it into higher-level products with global worth. If we do not do this, others will.
China forced global tech giants to play by their rules or forgo their market. India can’t mimic such heavy-handedness, but must have the same end: that value created by Indians is largely created for Indians and mostly enriches India. China’s provinces took the lead in creating tech giants; Alibaba and the others emerged from provincial capitals like Hangzhou to challenge the world. Ours is a continent-sized economy, and we need to think of our 29 states as 29 different ecosystems now bound together by far-reaching reforms like the GST — and each ecosystem must have a unique strategy to incubate world-beating innovation.
This must form a pivot for both the upcoming budgetary allocations and the data protection Bill that is being developed. The Bill must not just bolster privacy but also redefine India’s trade posture in a world where data fuels economies. If done right, this can foster local innovation – birthing new vernacular-language technologies that are transformative. If done wrong, it can disincentivise innovation and overseas investments.
The moment is now, and we must seize it in 2018: China’s digital protectionism and a US retreat can be analogous to Indian victory in Globalisation 4.0 – if, that is, we discover the regulatory sweet spot that brings home to India the largest chunk of online value creation, and creates a mature Indian platform economy.
An edited version of this article appeared in The Economic Times.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Samir Saran is the President of the Observer Research Foundation (ORF), India’s premier think tank, headquartered in New Delhi with affiliates in North America and ...
Read More +
PREV
