After the ban, what next for India’s digital ecosystem
To overcome weaknesses, foster innovation in the private sector; increase State capacity to govern new markets
The ministry of electronics and information technology (MEITY) banned 59 Chinese digital applications available in India on Monday evening. The list of banned applications includes Tiktok, a popular user-generated content platform, and UC Browser, the most widely used Internet browser in second and third-tier cities. The government ban, affected under the Information Technology (IT) Act, 2000, seems to form a part of the retaliatory strategy against Chinese incursions in Ladakh. This is the first time that India has used such a direct lever in the digital sphere, to react to military events.
Several commentators have warned that the Internet might splinter along national borders in the future, as countries such as India increasingly assert their sovereignty in cyberspace. This reality seems closer than ever, since the world is simultaneously witnessing the Covid-19 pandemic, a widespread economic slowdown and the destabilising impact of the trade war between the United States (US) and China. Uncertainty breeds fear-based responses like protectionism. This is evident in the responses of the US and the United Kingdom, which have signalled a retreat from globalisation, a framework they have championed for decades. The digital economy is not immune to such fundamental shifts.
It is worth asking whether India is prepared for a Balkanised digital world. According to Ericsson, global mobile data traffic was around 456 exabytes in 2019, of which India accounted for approximately 75 exabytes, or 16%. Around 14% of the global population resides in India, and therefore, it punches slightly above its weight in terms of mobile data consumption. However, India has not begun to generate commensurate economic value from this outsized data consumption yet. In fact, the global digital economy seems to mimic its physical counterpart, with the US and China making up the lion’s share.
According to the United Nations, the US and China account for 90% of the market capitalisation of the 70 largest digital platforms in the world. They also account for 75% of all patents related to blockchain technologies, 50% of global spending on the Internet of Things, and more than 75% of the global market for public cloud computing. It’s clear that the two countries will remain at the forefront of global technological developments, which will feed their dominance in the digital economy. The emergence of this bipolar digital landscape narrows India’s strategic choices. The world’s largest digital democracy must foster innovation, competition and scale in the private sector, as well as increase State capacity to govern new markets in parallel.
The biggest digital companies in the world are platforms that offer multiple functions. Such platforms now determine how a large share of the global population communicates, transacts, searches for information and services, buys consumer products, finds new jobs, stores data, distributes and markets products, and so on.
Many of the companies that India banned on Monday also follow the platform model. They achieved multi-functionality and a global scale because, like the US, China allows its digital entrepreneurs to take risks. The People’s Republic of China picks winners and provides unconditional State support for its national champions to scale. On the other hand, the US provides legal certainty for innovation and competition to flourish. India will have to strike a balance between both these approaches.
In either case, sudden bans cannot be part of India’s playbook. The digital ecosystem is a breeding ground for the creative destruction of old methods of doing business. It must also prompt a revisit of old approaches to economic regulation, including blunt instruments reminiscent of the licence-permit raj.
India’s digital applications are governed by a 20-year-old law and an eight-year-old policy. Both are unsuitable to digital markets because they were designed for the business process outsourcing ecosystem, not for modern digital applications or platforms. Similarly, the Copyright Act, which provides incentives and protections for most of the content, organised datasets and source codes, that sit at the heart of the digital economy, was last amended in 2012. India’s top 10 digital companies are valued at a tenth of the Chinese equivalents, while its per capita income is about 44% of China’s. There is, therefore, room for India to unlock greater value through a digital reboot of rules and regulations.
Finally, just as India is revisiting its alignments in international relations, it may have to develop a cogent strategy for trade and commerce in the digital economy. If the revenues of information technology-enabled services are anything to go by, a majority of digital economy revenues will come from exports. A large share of these exports will head westwards. This trend will hold because the economic impact of the pandemic is likely to be more pronounced in developing countries than in developed ones. The country will need exports to offset the concomitant slowdown in domestic consumption.
Since global trade is built on the principle of reciprocity, India must do to others, as it wishes for itself.
Our ability to move has shaped the world, and it will dictate the future of the human race. But as the world struggles through an unprecedented lockdown, it faces a scary, new question: How will cities safely move billions of people after a pandemic?
Before Covid-19, we took mobility for granted. On an average day, five million travelled by the Delhi Metro, and over 10 million by Delhi’s public buses. The Indian Railways carried over 24 million, and Mumbai’s buses over 30 million passengers a day. A million passengers travelled through India’s airports every day.
Today, those numbers are down sharply. As India thinks about how to reopen safely, the question will be how will it move millions, while keeping people safe. Can you have social distancing during rush hour on a Mumbai local train? In 2020, will we be torn between environment-friendly, efficient mass transit and fuel-guzzling personal transport?
It’s heartening to see that India’s pioneering technology services industry has embraced working from home. However, for many, personal transport or working from home is not an option. Mass transit must find solutions to get back up and running while slowing the spread of the coronavirus. The New York City Transit, responsible for the city’s buses and subway, is testing social distancing markers at stations, as well as “rides by reservation”. The city’s subway authorities disinfect each train every night. The Paris, London and Singapore Transit authorities are making face masks mandatory for riders, installing thermal scanners, and limiting the number of seats available on trains. In China, robots are disinfecting trains and stations, and providing hand sanitisers to passengers. Smart-card readers with thermal scanners can even spot feverish passengers.
My prediction is that many governments and transit companies will rely more on apps and contactless travel — a trend that was already taking hold, and will be catalysed by the crisis.
Airlines and long-distance travel options also aim to contain the spread by measures such as blocking the middle seats, thermal scanning for passengers, sanitisation upgrades, inter-seat separators, and readjusting the air-conditioning systems every three-to-four minutes.
These solutions are useful, but there is an opportunity for more. After spending my entire career in transportation, and now as CEO of Virgin Hyperloop, I believe it is critical that we collectively and proactively invest in infrastructure that will serve us in the next century. Let’s encourage investment that not only helps us rebuild, but evolve. This crisis is upon us and we need to provide a solution that moves the masses in a safe way, and helps to bolster the economy for the people of the region.
One of the first things we need to grapple with is figuring out how transportation should deal with future pandemics, in addition to running efficiently in normal circumstances.
As it turns out, the hyperloop’s basic design and technology make it ideally suited for social distancing, should the need arise. That’s because it delivers passengers with a fleet of pods, with an average of 28 seats per pod, that are guided by a command-and-control system that balances supply and demand. In “distancing operation” mode, where social distancing mandates the passenger density to be, say, reduced to half, the number of pods in the system can increase to move more people through the system safely. This can all happen while not stopping the system. Unlike rail, the pods are controlled by an artificial-intelligence-powered automation system, allowing them to travel within seconds of each other (like cars on a highway), safely.
The system is demand-responsive. The hyperloop can anticipate and control ridership in emergencies or special situations. You don’t have to “trust” passengers to be physically distant, as in subways, for example; you can enforce a certain number of empty seats on each pod or give priority to emergency and health care workers.
Even in “normal” operations, we still want to take precautions and provide a seamless customer experience. The hyperloop is designed to have touchless ticketing with minimum human exposure, advanced filtration, and regular cleaning. The system also enables a flexible station design, allowing decentralisation and less crowding at the stations since multiple smaller pods leave within minutes vs a larger train with multiple cars.
Safety is at the forefront of our minds right now, but it is critical that we think about the big picture. We must still look to fight congestion and the climate crisis. Take the Mumbai-pune corridor, where we hope to invest in and build the world’s first commercial hyperloop system, which will shrink a 3.5 hour trip to less than 30 minutes, with zero direct emissions. It has the capacity to move over 200 million passengers annually to meet the demand of this route. We feel that this private investment into Maharashtra will help support the people with new opportunities for growth. We hope that we can work together to make it happen in the near future. We are ready.
I still believe our ability to move will dictate the future of the human race. Our ability to move billions safely in a pandemic will help decide its present, and its near future. The tail of this pandemic is going to be a long one, and mass transit and transportation around the world has to adapt, so that passengers are safe and can continue with their lives.