Destiny in a microchip

Today, the signs of the influence of technology are all around us, yet most of us do not grasp the scale and gravity of its impact

Travelling around India today, you find vestiges of all the previous Great Games. Less than an hour outside of Delhi, you find yourself in the midst of the great Indo-Gangetic plains. Fields growing wheat, rice, mustard, sugarcane and various other crops line the banks of these rivers. This fertile agricultural belt along with the Indus River plains formed the cradle of the ancient north Indian civilisation. These river-based civilisations were quite successful at the Great Agri Game.

Amidst the fields of wheat and sugarcane lies Khurja, a small town known for its pottery. Legends of the town’s origins differ, but it is one of the oldest centres for glazed pottery in India. Close your eyes, and you could be transported to the 15th century when a town like Khurja would be an integral trade link in the Silk Roads spanning the Eurasian landmass. India’s handicrafts and artisanal products made it a valuable link in the Great Trading Game.

Interspersed with the farms and artisanal centres are the signs of India’s attempt at the next Great Game, industrialisation. The same Ganga–Yamuna Doab is dotted with factories manufacturing refined sugar and various forms of machinery and equipment. Ghaziabad and Noida are major hubs for small- and mid-sized factories, as is Okhla.

The signs of the transition to the digital economy are now equally evident too. Just half an hour south of Delhi, the suburb of Gurgaon, is lined with the offices of companies and representatives of the fast-growing digital economy of India. Gurgaon is the face of the new, dynamic Indian economy.

All these signs of history — and all the Great Games we have seen over the last few millennia — co-exist within an hour’s radius of central Delhi, the seat of the Indian government.

Much as trade, industrialisation and capitalism did in the previous eras, technology will now increasingly shape the economic destiny of nations. Technology is no longer just one sector among many, but a force permeating and changing all sectors of the economy.

In fact, the digital economy, buoyed by its rapid growth, is fast replacing the industrial economy. Technology firms — not the industrial-era firms — are capturing a large part of the value chain or share of wallets of consumers and businesses. Technology is enabling the creation of new markets, creating new demand and new supply where none existed before. Tech-enabled marketplaces and platforms are enabling more efficient matching of supply and demand. The newly emerging technology ecosystems are often becoming the catalysts for economic growth and disruption across multiple sectors of the economy.

However, the changing structure of the economy has also raised many important questions about the implications. The digital economy is growing rapidly, yet the market dominance of a few technology platforms is leading to an unprecedented concentration of wealth amongst a few firms and individuals. The tech sector has become the preferred path for upward economic and social mobility, yet the increasing economic disparity has raised questions about whether the wealth of Big Tech firms will translate to wealth for nations and societies. Technology is leading to the creation of new types of jobs and a transformed vision of the future of work. Yet, as it has done historically, technology is also leading to structural unemployment.

Understanding the core drivers of these complexities will be critical for identifying the answers and succeeding in the digital economy. While having internet users is a necessary prerequisite to participating in the digital economy, it is definitely not sufficient for becoming a major digital power. As a World Economic Forum (WEF) report suggested, success (and prosperity) in the digital economy will not be determined by the number of mobile phones and internet connections, but rather by the ownership of infrastructure, technologies, code and data.

Many emerging digital economies such as India are unfortunately focused on patting themselves on the back for their fast-growing number of internet or smartphone users. When India touts itself as the second- or third-largest smartphone internet market, it is important not to forget that India was also the largest colony controlled by the colonial powers a couple of hundred years ago. It was the ‘jewel in the crown’ of the British empire, much like today where it takes pride in being the ‘jewel in the crown’ of the tech empires.

Instead, the real conversation and analysis have to be around questions such as: Who is building and benefiting from the digital infrastructure? Who has the ability to cut off digital access to certain regions? Who owns the technology underlying most of today’s technological advancements? Who owns the immense amount of data being generated every second and the insights that can be derived from that? Who derives or extracts the most value from the new digital value chains?

Is digital colonialism inevitable?

Several countries — especially those whose digital economies are dominated by foreign Big Tech firms — have raised concerns about ‘digital colonialism’ as a modern-day avatar of the exploitative colonisation of the past. Within this broader idea of digital colonialism lies the idea of ‘data colonialism’.

In many ways, data-grab is the new form of land grab. Imagine many centuries ago, when human beings, as they discovered land, laid claim to it since it was deemed unoccupied (the British-era concept of terra nullius essentially referred to this). According to data experts, today’s tech firms are currently engaged in data-based wealth-grab or virtual land-grab.

This harks back to the European colonial days when the European trading companies were able to establish trading monopolies, and eventually political and economic control in their colonies. Consequently, they were able to extract great amounts of wealth from their colonies, in the form of natural resources, commodities and favourable trade, to transfer back to their home territories.

But by no means is digital colonialism an inevitable reality. Many, though not all, nation-states today have a different level of agency, strength, focus on independence and sovereignty, and understanding of history. Nation-states like India are fighting back against the growing influence of Big Tech and do have a wide range of tools at their disposal for their fight.

Governments, society and citizens must play an active role in ensuring fair competition, risk mitigation and protection of the fundamental rights of people. Governments creating better policies and frameworks for data governance could lead the way with the development of more open, fairer data protocols. Initiatives by India in this regard are again an interesting example. Its unique ID-based public data infrastructure and national open digital ecosystems (NODEs) could provide an alternative, fairer model of data ownership and usage.

This time around, a combination of factors might work to prevent digital or data colonialism. The rivalry between Big Tech firms could see some firms take up a stronger stance against extractive relationships, which could then become the expectation and norm across the industry. Similarly, socio-political movements that arise to fight against the rising inequality could take up this cause.

Other emerging technologies such as blockchain and web3 could form the backbone of alternate data management structures that do not lend themselves to extractive relationships. There are indeed alternative ways of leveraging technology to build a better world than we were able to during the previous eras of industrialisation, colonisation, capitalism, mass agriculture and mercantilist trade.

What should the game plan be?

There are many strategies that countries like India can adopt to succeed in the Great Tech Game and not be stuck with fears of digital colonialism. As the structure of the economy shifts drastically, India must reorient itself to become digitally competitive. It cannot be thinking only of industrial policies and strategies; it must also be thinking deeply about its technology policies and digital strategies. The country must focus on the Great Tech Game, and not just on the previous economic game of industrialisation.

A ‘Make in India’ programme, for example, must therefore be supplemented with a ‘Digital India’ or ‘Code in India’ programme. At the same time, India must become a tech nation, not just a talent nation. It has to move up and away from a simple labour arbitrage strategy to a tech arbitrage strategy. It cannot simply continue to play on its cheap engineering labour but must also play on building ownership of unique, innovative technology. The country has to develop a culture — and a well-funded ecosystem — of fundamental scientific and technological research and build core tech IP across sectors.

The digital public infrastructure and goods being developed in India, also known as the India stack, could be a potential game-changer. The IndiaStack could be the digital operating system (much like Apple’s iOS or Google’s Android) upon which a marketplace of applications could be built by Indian and global companies and entrepreneurs. If China is exporting hard digital infrastructure globally, India could very well export soft public digital infrastructure globally.

The nation must also keep an unstinted focus on the future. Even as it finds niches within the existing tech markets, it must seek to pro-actively build a strong foundation for leadership in the next big set of transformative technologies, whether it is climate tech or biotech or others.

A strategy to compete in the Great Tech Game can help the country leapfrog into the ‘big league’ of technology nations in the coming decades, and transform the socio-economic prospects of over a billion Indians. Failure to compete, on the other hand, will have equally serious adverse ramifications.

The writer is a technology venture capitalist and entrepreneur and has formerly been a policy advisor and a management consultant. A graduate of the Wharton School and Harvard Kennedy School, he has written extensively on foreign policy, geopolitics, national security, technology and entrepreneurship. He recently authored ‘The Great Tech Game’ published by HarperCollins.