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2024 is the year of elections with at least 64 countries (including India and plus the EU) representing about half the world’s population going to the polls. These will impact the post-Covid world in profound ways by reordering geopolitics, trade, security, issues of sovereignty, energy, among other areas. Also, unlike any other time in the past, this period will see technology play an immensely influential role on people, policies, politics, progress and peace.
No wonder that calls for the regulation of technology are emerging even as technology is being weaponized in myriad ways. India will need to deeply internalize this and grab the huge opportunity technology offers to transform itself to not just a developed country but an independent world power.
With very favorable demographics, a big and growing market, and a large talent base, India is set to become a developed country, the third largest, by 2047-48 with a $26 trillion economy, according to an EY report. However, if we desire to be an independent world power, to be able to craft our destiny, we need to develop capacity and capability in technology. The lack of our technological prowess, even as technology plays an increasingly important role in determining economic and military power, has been shown up in defense, energy, telecom, industry, agriculture, and many more areas, making us ever dependent on others. In Independent India, we invested in science research but not in developing technology and in engendering innovation ecosystems. This needs to change: we therefore need an agenda for strategic technology.
All agendas have a purpose. We need a 25-year mission for the country, such as “Technology for the good of our people and others, growth of our economy and business, security of the country; be among the top 5 in the world in selected technologies of the future e.g. AI, quantum computing, 6G Telecom, semiconductors, remote sensing satellites, rocket engines, drug discovery, medical devices, brain-machine interfaces”.
Delivering on the mission requires unlocking various elements.
Talent
Given the rapid pace of change, the capacity to understand, encourage, facilitate and regulate technology within government needs to be enhanced. This will require inducting large numbers of technocrats and organizations to work with the government to create and execute policies keeping the mission in mind.
Invite top NRI technologists and researchers (e.g. 8% of AI researchers are NRIs) back to India by making it attractive (e.g. ease of doing business, ease of living, financial incentives and rewards) for them to create technology and businesses.
Partner with startups, private businesses, top talent from academic institutions to create technology solutions to key problems facing different sectors of the economy. Need to have technology development and deployment incentives for our Council of Scientific and Industrial Research (CSIR) and Defence Labs.
Capital
There has to be unlocking of capital for creating adequate infrastructure, for example, data centers and for risky technology development and deployment. Long-term pools like pension and insurance funds can be used to seed long-term technology development. Appropriate structures have to be created to enable this. Encouraging private capital (overseas and Indian) to fund high-risk technology development and businesses with tax breaks and incentives. As India becomes richer, we need to unlock more private Indian capital alongside public and overseas funds for Indian technology development and deployment.
Joint ventures with foreign entities providing for technology transfer and capital investment against Indian talent, costs and market access are negotiated.
Ensuring that Indian technology companies (as opposed to IT services companies) list on Indian stock markets should be a priority to allow sophisticated investors to participate, lower cost capital raising, enable more ownership and value capture by Indian stock holders.
Markets
The attractiveness of a vast and growing Indian market needs to be leveraged to our advantage as it provides economies of scale. We need to leverage access to our market to be able to access technology and capital. In addition, we have to see our technology find international markets through trade agreements, funding mechanisms and appropriate structures. We have to aggressively move to become a technology provider especially of our Digital Public Infrastructures (DPIs).
Technology needs markets and customers to take root and thrive. The government (the center and states) as a big purchaser of goods and services must ensure that all ministries, various means of regulation and governance, Public Sector Units (PSUs), railways, defense and other bodies are digitized, are connected to each other and enabled by technology from Indian companies, for example, as in the Income Tax department. The trust deficit that exists between the state and individuals can also be largely addressed with existing technology.
There must be funds and incentives offered for technology, especially various elements of our digital public infrastructure to permeate our justice systems; health; agriculture and micro, small and medium and enterprises (MSMEs); all of which are technology laggards. This will give a big fillip to efficiency and productivity while lowering costs.
Institutions
India’s pioneering and successful digitalisation initiatives are being enabled by new institutions like the National Payments Corporation of India (NPCI) [for payments like Unified Payments Interface (UPI)] and Open Network for Digital Commerce (ONDC, for ecommerce), both of which are Section 8 companies with private and public sector participation.
We need many more new institutions for different technology areas, led by empowered technocrats, while revamping and reimagining existing ones that provide for easier funding, degrees of freedom in operations, hiring and compensation. Encouraging credible educational institutions to house technology development and deployment initiatives with government and private support is also required.
Indian technology think-tanks, consulting and research firms need to be nurtured to ensure that technology is in keeping with the mission.
Standards
Technology development has to lead to the creation of standards, either de facto or de jure. UPI, for example, has become a de facto one while the International Telecom Union (ITU) standards for telecom are de facto. Standards alongside “markets” and “institutions” are powerful means of ensuring compliance, driving economies of scale and creating economic value. We have to learn to create new standards, for example, Digital ID, for Data Empowerment and Protection Architecture (DEPA) by creating new Technology Standards Organizations.
Ecosystems & Value Chains
A mobile phone has a gorilla glass cover, a camera, a processor, an operating system, battery, radio, casing, among others. Each piece of technology, from different providers, comes together into the making of a phone as part of its value chain within an ecosystem. Understanding these value chains and ecosystems helps in determining the criticality of certain building blocks with concomitant approaches to their development and sourcing. Chinese thinking of, say, garment value chains and pharma made them become top makers of industrial sewing machines and Application Programming Interfaces (APIs) that we respectively import for our garment industry and our generics pharma industry! Needless to say, training and skilling are important constituents of ecosystems.
Regulations
Regulations based on principles that facilitate but do not allow unimaginative gatekeepers to inhibit technology development and innovation are necessary. We must enable the secure unlocking of Indian data from various databases for our purposes such as AI for health, lending, languages, among others.
Regulations that permit easy and low cost import of key technology building blocks, for setting up infrastructure, as well as for lowering the costs and Ease of doing Business (EoDB) is a must for innovation to thrive, and for Indian companies to remain domiciled in India. We have examples from the US, the EU and China to guide us in this regard.
Unlocking the above items have to be part of a technology mission and a national priority. We need a Vannevar Bush moment. But they are a must. With the opportunities ahead, we need to marshall and enhance our capabilities, build new ones to be able to control our destiny. Else, someone else will.
(Exclusive to NatStrat)
Sharmila Kantha
