Face The Book Of Digital Monopolies: Why India Must Develop Swadeshi Apps

Article first published in Outlook at https://www.outlookindia.com/website/story/opinion-time-to-end-digital-monopolies-and-promote-indian-apps-for-atmanirbhar-bharat/358971?utm_content=buffer925b4&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

Now that the bugle call of Atmanirbhar Bharat has been raised, one has to put money where the mouth is and start supporting the Indian apps. It is high time that the government and public institutions chart out a glide path away from digital monopolies that are not completely under the control of the Republic of India.

Jaijit Bhattacharya19 August 2020

Representational image

What are digital monopolies and why are they so dangerous? A digital monopoly, as the name says, is a monopoly of any service in the online universe. An online monopoly derives its monopolistic behaviour from a phenomenon called the Network Effect. It follows a principle in electrical engineering called the Metcalfe’s law that essentially says that the value of a network grows exponentially with each addition to that network.

Translating this to digital monopolies, if you are not on Facebook, then your joining Facebook will not increase its value by 1, but will add value to the Facebook network in an exponential fashion since you can now connect with not one person on Facebook, but with hundreds and thousands of people. So, if you are given a choice of joining a digital platform where you can connect with hundreds of your friends and acquaintances versus joining a new platform where you can connect with perhaps ten or less of your friends, what will you join? Clearly you will join the platform where you can connect with more people. This is a simple game theoretic outcome. So, you and everyone else, will gravitate to two or three such platforms, which will transform into the nerve centre for influencing society. This is Network Effect.

The question that arises is how does Network Effect make such platforms dangerous? Why is a company that has, say monopoly over salt distribution, not considered to be dangerous? The reason why such digital monopolies are dangerous is because they continue to largely operate outside the jurisdiction of the sovereign government. Any issue that is brought up to their local representative office is answered with an excuse that the local office is a different company that is not responsible for content. It is the parent company, sitting outside the borders of the nation, that is responsible for the content, and the sovereign government has limited jurisdiction over the parent entity.

However, what makes them even more dangerous is that they derive their powers directly from the people. They are possibly more powerful than the government in the area they operate in. Imagine the government coming down heavily on violations by these digital monopolies which include not just Facebook but Google, Amazon, Twitter etc. Let’s say, hypothetically, the government found that Facebook is working against the interest of the nation and asks Facebook to stop operating in India. Such a decision would disrupt humongous amount of commerce in India, would impact MSME’s who do business through Facebook, disrupt communication as Facebook-owned Whatsapp would also have to stop operating and there would be a massive pushback from the people who are addicted to the new opium of social media. Or if one stops Google, millions of taxi drivers of cab aggregator companies will become jobless without the location service. Such is the power of the Digital monopolies, which is why I had coined the term “Technological Sovereignty” more than a decade and a half ago, as the government does not just lose sovereignty to another country but to a company (rings a bell with how one of the most profitable companies in human history, The East India Company, started off?).

Hence, one should look at the recent controversy on Facebook that erupted based on an article in the American newspaper, the Wall Street Journal (WSJ) “Facebook’s Hate-Speech Rules Collide With Indian Politics”, through this lens. The headline has an interesting focus – it focuses on Facebook’s meddling with Indian politics and hence with the will of the people. This is an extremely dangerous phenomenon. The power of narrative, which stitches a story based on selective data points, can strongly influence decision making of people to extreme levels. If one recollects the havoc that was played out by the game “Blue Whale” that pushed teenagers and young adults to commit suicide by playing with their thought process and judgement. And the algorithms have since been improved manifolds with massive increase in computing power and with dollops of funds flowing into the science of mind control through data.

It is not shocking anymore that voters can be manipulated to vote in a certain manner en masse, based on the manipulations through the social media platforms, which not only know who your friends are and what your opinion is on a browser, but knows your deepest desires based on the messages you are sharing on your mobile phone (in case of Facebook, they control Facebook, Whatsapp and Instagram, giving them insight to not only what you are posting, but also what your children and close relatives are posting). It was not long ago that the main opposition party in India was accused of collaborating with Cambridge Analytica, a UK-based entity, that received data from Facebook to go around the globe helping political parties use the personal data to win elections (it is another story that the opposition party did not win the elections).

Now is the turn of the ruling party to face the heat of standing to gain from the actions, or more accurately the inactions of Facebook on a hate comment allegedly posted by one of its MLA’s from Telangana. The said MLA has come out with his side of the story that his Facebook page had been hacked two years ago in 2018, and he had filed a complaint at that time that supposedly blocked his page. However, the accusations on Facebook made by WSJ are grave accusations. The WSJ article says that Facebook detected that the postings on the page of the said politician were offensive, but took the call of not removing them as the person was from the ruling party. It demonstrates how Facebook has abrogated the power to decide what information to be provided to people, and what needs to be filtered out, and this decision is not based on any ethics or morality, but based on the sole motive of profit maximization (again reminds us of the arbitrary rules that were imposed by the East India Company, albeit, Facebook is no East India Company, but handing over the probity of running a nation to a company, even if it is in small parts, is a highly dangerous situation to be in, as the precedents in history tell us).

It is also interesting to note that the newspaper that brought out the so-called expose, runs a paid online site, where one can read the full news article only after paying. What is visible on the site, without making any payments, is a highly sensationalized byte which says “In Facebook posts and public appearances, Indian politician T. Raja Singh has said Rohingya Muslim immigrants should be shot, called Muslims traitors and threatened to raze mosques.” It serves to catch attention, pique the interest and let the issue spread like wildfire in India, which offers one of the largest online catchments of readers in the world. It would be interesting to know how many more paid readers did WSJ manage to garner with this sensationalised news article, that hits a raw nerve in India.

To conclude, one has to note the actors in this rather sordid saga – it has the Wall Street Journal and Facebook and we still do not know what the facts are as Facebook has denied that it had deliberately not removed the alleged hate speech. Neither WSJ, nor Facebook are under the jurisdiction of the Republic of India. Their interests in India do not go beyond their revenue maximization goals. They neither have their families in India, nor have any plans to move to India. If India burns due to riots (as we saw happening in Bangalore recently where allegedly a tweet led to instant riots), it does not affect them, unless it leads to advertisement revenues going down. Unfortunately, with every such event, more people join these platforms out of curiosity, contributing to a vicious cycle.

Having noted the issue, one cannot take a luddite stance either of breaking everything that is not under our control. But, when the political framework of the country is under threat, it is equally surprising to see the Election Commission, the temple of India’s democracy, endorsing a platform such as Facebook. Now that the bugle call of Atmanirbhar Bharat has been raised, one has to put money where the mouth is and start supporting these Indian apps. If user base is an issue, there are established Indian apps such as Sharechat with over 250 million users, Hike messenger with over 100 million users and others, which are as sizable as Facebook’s user base in India.

It is high time that the government and public institutions chart out a glide path away from digital monopolies that are not completely under the control of the Republic of India. This is crucial from the perspective of national security and technological sovereignty.

(The author is president, Centre for Digital Economy Policy Research. Views expressed are personal.)

एप्स पर प्रतिबंध से चीनी कंपनियों को लगा तगड़ा झटका वहीं अन्य देश भी भारत की राह पर चल सकते हैं

 First Published in Dainik Jagaran at https://m-jagran-com.cdn.ampproject.org/v/s/m.jagran.com/lite/editorial/apnibaat-ban-on-apps-will-give-big-blow-to-chinese-companies-while-other-countries-can-also-follow-path-of-india-20463280.html?usqp=mq331AQFKAGwASA%3D&amp_js_v=0.1#aoh=15979378046333&referrer=https%3A%2F%2Fwww.google.com&amp_tf=From%20%251%24s&ampshare=https%3A%2F%2Fwww.jagran.com%2Feditorial%2Fapnibaat-ban-on-apps-will-give-big-blow-to-chinese-companies-while-other-countries-can-also-follow-path-of-india-20463280.html

देर से उठाया गया दुरुस्त कदम

[ जयजित भट्टाचार्य ]: सोमवार को भारत सरकार ने 59 चीनी मोबाइल एप्स पर प्रतिबंध लगा दिया। इस प्रतिबंध के पीछे डाटा सुरक्षा और निजता जैसे पहलुओं को वजह बताया जा रहा है, मगर यह मसला तो गूगल, फेसबुक और ट्विटर के साथ भी है। फिर उन्हेंं क्यों बख्श दिया गया? स्पष्ट है यह कवायद केवल डाटा सुरक्षा और निजता को ध्यान में रखकर ही नहीं की गई। यह आवरण केवल कुछ अंतराराष्ट्रीय परंपराओं का सम्मान करने के लिहाज से डाला गया है। इसका मकसद तो चीन को सख्त संदेश देना है।

एप्स पर प्रतिबंध: चीन की बिलबिलाहट से साफ है कि मोदी का निशाना एकदम सटीक जगह लगा

वास्तव में चीनी एप तो हमेशा से सरकार के निशाने पर रहे, लेकिन सीमा पर चीन के साथ हालिया तनाव के बाद सरकार ने आखिरकार ट्रिगर दबा ही दिया। चूंकि चीन अब प्रमुख रूप से एक व्यापारिक देश है और भारत उसके उत्पादों का एक अहम बाजार तो अपने एप्स पर प्रतिबंध के फैसले को लेकर चीन की बिलबिलाहट से साफ है कि सरकार का निशाना एकदम सटीक जगह लगा है।

चीन पर दोहरी चोट

वास्तव में यह चीन के लिए दोहरी चोट है। भारत के इस कदम से जहां चीन की दिग्गज टेक कंपनियों की वैश्विक महत्वाकांक्षाओं को तगड़ा झटका लगेगा वहीं तमाम दूसरे देश भी भारत की तर्ज पर चीनी कंपनियों से पीछा छुड़ा सकते हैं। अमेरिका द्वारा मंगलवार को हुआवे और जेटीई जैसी चीनी कंपनियों को राष्ट्रीय सुरक्षा के लिए खतरा बताना इसी रुझान की पुष्टि करता है।

चीन का रवैया हमेशा से संदिग्ध रहा

मोदी सरकार का यह कदम बिल्कुल सही है। वास्तव में यह तो काफी पहले ही हो जाना चाहिए था। हम कम से कम बीते एक दशक से इसकी दुहाई देते आए हैं कि सरकार को देश के व्यापक हितों में विदेशी तकनीकी पर निर्भरता कम करनी चाहिए। यदि वह तकनीक चीन जैसे देश की हो तो हमें और सतर्क रहने की जरूरत है। चीन का रवैया हमेशा से संदिग्ध रहा है। अतीत में मंगोलिया से लेकर तिब्बत और शिनजियांग तक उसका अतिक्रमण और वर्तमान में भी तमाम देशों के साथ तकरार उसकी विस्तारवादी बदनीयती को ही जाहिर करता है।

दुनिया की सबसे बड़ी ताकत बनने के लालच में चीन अनुचित नीतियों का सहारा ले रहा

दुनिया की सबसे बड़ी ताकत बनने के लालच में वह अनुचित नीतियों का सहारा ले रहा है। इसमें नई तकनीक और एप्स उसके हथियार बनते दिख रहे हैं। बीते दिनों ऑस्ट्रेलिया पर हुआ साइबर हमला इसकी मिसाल है। यह हमला प्रायोगिक तौर पर किया गया ताकि चीन अपनी क्षमताओं को भांप सके कि कैसे वह एक गोली दागे बिना अपने प्रतिद्वंद्वी देश को घुटनों के बल पर ला सके। चीन ने इसमें महारत हासिल कर ली है और वह अपनी इन क्षमताओं को लगातार धार भी देता जा रहा है।

भविष्य की लड़ाइयां तकनीकी मोर्चे पर लड़ी जाएंगी

तमाम सामरिक विश्लेषकों का मानना है कि भविष्य की लड़ाइयां तकनीकी मोर्चे पर लड़ी जाएंगी। कोई देश अपने दुश्मन देश की बिजली व्यवस्था को छिन्न-भिन्न कर उसे लचर बना सकता है। दुश्मन देश के लड़ाकू विमानों की उड़ान को ही प्रभावित कर सकता है। सैन्य रसद को पहुंचाने में गतिरोध उत्पन्न कर सकता है। तब बड़ी से बड़ी सेना भी उपयोगी नहीं हो सकती। इसे संभव बनाने में निजी जानकारियां बहुत उपयोगी होती हैं जिन्हेंं एप के जरिये चुराया जा सकता है।

ईरान में तो परमाणु ठिकाने पर तकनीकी दक्षता से तोड़फोड़ तक करा दी गई

यह सही है कि सेना और अन्य संवेदनशील विभागों में तमाम एप्स प्रतिबंधित हैं, लेकिन उनके मित्र और स्वजन तो उन्हेंं इस्तेमाल कर सकते हैं। इसमें सेंधमारी कहीं से भी हो सकती है। सूचनाएं जुटाकर किसी को लुभाकर या मजबूर कर राष्ट्रीय हितों को क्षति पहुंचाई जा सकती है। यह एक तरह से मिनी हनीट्रैप जैसा ही मामला है। बीते दिनों बांग्लादेश में एक बैंक से बड़ी रकम इसी तरह निकाली गई, जिसके बारे में अभी तक कोई सुराग नहीं मिला है। ईरान में तो परमाणु ठिकाने पर तकनीकी दक्षता से तोड़फोड़ तक करा दी गई।

संवेदनशील सूचनाएं जुटाने के मामले में एप भेदिये का काम करता है

संवेदनशील सूचनाएं जुटाने के मामले में एप किसी भेदिये का काम करते हैं। पुराने जमाने में किले बहुत मजबूत बनाए जाते थे, लेकिन कोई न कोई भेदिया उन किलों को भी ध्वस्त करा देता था। ये एप भी कुछ ऐसे ही हैं। ऐसे में हमें अपना सुरक्षा घेरा और सशक्त बनाना होगा जिसमें सबसे पहला कदम तो इनसे छुटकारा पाना ही है। फिर हमें अपना मोर्चा मजबूत बनाना है। याद रखें कि इस दौर में तकनीकी संप्रभुता भी भौगोलिक एवं राजनीतिक संप्रभुता जितनी ही महत्वपूर्ण है। हमें इस मामले में कोई ढिलाई नहीं करनी होगी।

खोजडॉटकॉम गूगल के संसाधनों के सामने फुस्स हो गया

भारत सरकार ने भले ही 59 चीनी एप्स प्रतिबंधित कर दिए हों, लेकिन यदि एपल स्टोर और गूगल एंड्रॉयड प्ले स्टोर इन्हेंं अपने प्लेटफॉर्म से हटाने को राजी नहीं होते तब सरकार क्या करती? ऐसे में तकनीकी रूप से संप्रभु कौन होता? एपल और गूगल जैसी कंपनियां या भारत सरकार? हमें यह स्थिति बदलनी होगी। इसके लिए सरकारी प्रोत्साहन आवश्यक ही नहीं, बल्कि अनिवार्य होगा। हमने काफी पहले ही कुछ पहल की थीं, लेकिन सरकारी सहयोग के अभाव में वे फलीभूत नहीं हो पाईं। जैसे गूगल का मुकाबला करने के लिए 2007 में हमने खोजडॉटकॉम जैसा दांव चला जो गूगल के संसाधनों के सामने फुस्स हो गया। यह उस समय की बात है जब चीन में गूगल के विकल्प बायडू का अंकुर भी नहीं फूटा था। इस दौरान चीन कहां से कहां पहुंच गया।

वॉट्सएप पर दंगों से लेकर हिंसक भीड़ के हमले और चुनावों को प्रभावित करने तक के आरोप लगे 

एप्स से जुड़े जोखिमों को देखते हुए कुछ समय पहले वॉट्सएप जैसे मैसेजिंग एप को लेकर भी सवाल उठे थे। सरकार की सख्ती के बाद उसने कुछ बदलाव कर सहयोग किया है, फिर भी हमें एहतियात बरतने की जरूरत है, क्योंकि वॉट्सएप पर दंगों से लेकर हिंसक भीड़ के हमले और चुनावों को प्रभावित करने तक के आरोप लगे हैं। चूंकि वह अमेरिकी कंपनी फेसबुक का एप है तो उसके लिए हमारा नजरिया अलग है। इसका कारण यह है कि अमेरिका से हमें कोई खतरा नहीं दिखता, जबकि चीन समय-समय पर हमारे लिए चुनौती पेश करता आया है।

चीन को जवाब देने के लिए सरकार ने उसके संदिग्ध एप्स पर किया प्रहार 

चीन को जवाब देने के लिए सरकार ने उसके संदिग्ध एप्स पर जो प्रहार किया है उसका लाभ तभी मिल पाएगा जब वह उनके विकल्प तैयार करने के लिए देसी उद्यमियों और इनोवेटर्स को प्रोत्साहन देकर एक आदर्श परिवेश तैयार करे। इस सिलसिले में शेयर चैट, चिंगारी, जोहो मीटिंग, एयरमीट और जुप-पीओएस जैसे तमाम नाम सामने आए हैं। यदि इन्हेंं सरकार और यूजर्स का समर्थन मिले तो ये न केवल देश, बल्कि वैश्विक स्तर पर भी सफलता के झंडे गाड़ सकते हैं।

( लेखक सेंटर फॉर डिजिटल इकोनॉमी पॉलिसी रिसर्च के प्रेसिडेंट हैं )

With App Ban, India Has Fired First Salvo In Trade War With China. How Can Dragon Retaliate?

Story first appeared in Outlook magazine at https://www.outlookindia.com/website/story/opinion-with-app-ban-india-has-fired-first-salvo-in-trade-war-with-china-how-can-dragon-retaliate/356169

Even though Beijing has been indulging in a low-intensity trade war for over a decade, with rampant dumping of state subsidised products, it is only recently that India took the first big overt step towards this regard.

With the banning of 59 Chinese mobile apps, the first salvo in the trade war between India and China has officially been fired by New Delhi. Even though Beijing has been indulging in a low-intensity trade war for over a decade, with rampant dumping of state subsidised products, it is only recently that India took the first big overt step towards this regard. However, the question that needs to be answered is why has China not upped the ante on the digital trade war by stopping selected imports from India? And what will China do to retaliate against apps ban, which the government says poses a threat to country’s security.

The answer to that question lies in the nature of trade between India and China. It is no secret that India largely exports raw materials to China and China provides value-added finished products to India. India’s exports to China consists of cotton yarn, which account for 12.17 per cent of total exports to the country, followed by iron ores and concentrates, including refined copper and copper alloys which account for 10.53 per cent and 6.98 per cent of exports respectively. India’s exports to China largely comprise of ores, slag and ash, iron and steel, plastics, organic chemicals, and cotton.

Indian imports from China consist of high value-added products including electronics, home products, construction material, phones, telecom equipment and so on.

This is the same trade template that was followed by the East India Company once it had political control over India, and it promptly went on to destroy the weaving industry in order to eliminate competition to low quality, large-scale textile coming from Britain. So, India would provide the raw materials for textiles and eventually for other products and, in return, would import low quality finished goods. In such a trade template, the trading partner that cuts off import of raw materials will be hit harder than the trading partner that is cutting off import of finished goods.

In the context of apps, stopping the import of digital offerings, i.e apps which only have entertainment value, will have the least impact on downstream value chain. Of course, there will be some job loss in terms of those who provided content and the operational jobs, but it would not be a deep fundamental impact. Moreover, it is exactly what China did more than a decade ago to digital offerings from the West, that included Facebook, Amazon, Twitter, etc. and allowed domestic firms to rip-off the Intellectual Property Rights (IPR) of these digital offerings and make local versions with additional local features. These local firms—Baidu, Tencent, Alibaba, Bytedance, etc. have now turned into global predatory digital companies and have continued their practice of scant regard for IPR in the local markets where they operate. 

Now if India stops the import of APIs needed for drug manufacturing, then it would be a different story, as it would decimate the entire Indian pharma industry and cause pain to the general public. So, in the short run, India will find it difficult to stop imports of raw materials such as APIs.

By the same token, China will find it difficult to stop raw material imports from India, unless they can be replaced by imports from another country.

And that is the conundrum that China faces. Over the years, it has crafted a mighty wall of non-tariff trade barriers which are daunting for anyone who does not bring in IPR into their offerings. So, largely companies who were willing to let go off their IPR, through forced joint ventures with local Chinese partners, were allowed access to the Chinese market. It was as late at April 2018 that China finally removed restrictions on foreign automobile companies to have more than 50 per cent ownership of their operations in China. But then again, it was too little, too late, as by then, Chinese companies had leached out all the IPR of these foreign auto companies. Therefore, India’s IT and pharmaceutical companies have a mere toehold in China, as they do not bring in any differentiating IPR and have had to face the gauntlet of China’s mighty protectionist wall. Hence, even the initial Indian IT companies which were allowed to set base were more into training such as NIIT, which essentially makes it a raw material supplier.

So, Indian exporters kept hitting the wall of non-tariff trade barriers in China in their attempts to enter the Chinese market with value-added products. Such trade barriers include lack of information on customs procedures; imposition of excessive customs and other levies with frequent rate changes; complex customs valuation procedure; absence of a specified nodal agency; lack of transparency regarding technical standards; differentiated testing norms for imported and domestic products; unfamiliarity with regard to provincial rules and regulations; and frequent change in policies without any advance information.

The outcome is that China is largely an importer of raw materials from India, and hence, cutting off any supply from India will actually hit its own industries. And since China has rapidly and successfully antagonised almost all its trading partners, with Australia being the latest, it will find it difficult to replace these Indian imports with that of another country. Not that this will stop China from taking a mis-adventurous step in the trade war.

Thus, it would be interesting to see what retaliatory steps China takes in the trade tangle. With wriggle room limited for the Dragon, can it take real retaliatory steps? That brings the thought that a Tiger is real, a Dragon is not.

India-Australia Cybersecurity cooperation in context of deteriorating ge...

Need to achieve Technological sovereignty

First published in https://stratnewsglobal.com/technological-sovereignty-and-how-india-lacks-it/

 

Sovereignty is one of the cornerstones for ensuring the security of the country and ensures that India as a nation can stand up to pressures from other nations. Sovereignty is critical to ensure our economic independence.

As India moves into occupying the space of an IT superpower, the ability of the ICT industry to provide the requisite technologies reliably for civilian requirements and for military requirements, needs to be significantly enhanced. The issue is compounded with the fact that India has limited presence at the high-stake tables of Digital standards. Standards has turned out to be a major stumbling block in the quest for technological sovereignty. Given that India, as of now, appears to have limited presence at the global forums on international digital standards, we appear to be abdicating our responsibility to secure our IT and digital industry as well as IT usage. This situation has very deep implications on our economy and our defence preparedness.

With the lack of control over the technological layers, Indian economy and defense institutions will be challenged to protect the nation from Cyberwarfare.

More importantly, military hardware itself could be subject to intrusions and control by adversaries, thanks to the increased “intelligence” of the equipment.

Given that tactical initiatives on the ground need to be backed up with complex supply chain which are increasingly dependent on critical information infrastructure such as Railways Signaling, telecommunications network etc, the entire economy and military strategy could be threatened by compromising the critical information infrastructure which has non-authenticated ICT components.

With the same “ICT intrusions”, the Financial Infrastructure of the country can be brought down, impacting the ability of the military to sustain a conventional warfare.

The impact on Network Centric Warfare is also obvious.

Thus, it is imperative that we move towards digital ecosystem which provides greater control over the digital infrastructure.

More importantly, imagine the impact on the economy in general, and the defence logistics in particular, if the “.in” Top Level Domain (TLD) is deleted from the Internet root servers. Such a move would cripple the economy and severely restrict the ability of the Indian defence forces to respond to a strategic situation. It would be worthwhile to mention at this stage that India has minimal control, if not no control, over the root servers. In other words, India has no technological sovereignty over the theatre where cyber warfare gets played out. Thus, an obvious way forward for India as a nation is to build the ecosystem of technological sovereignty which will strengthen its capability.

There is also an increased threat to Technological Sovereignty from Digital Monopolies that control vast amounts of data pertaining to the country, the citizens and the businesses. It is important to address the threat to Technological Sovereignty from Digital Monopolies. This is especially true of Digital Utilities that are widespread, are ubiquitously used and that benefit from network effect an hence become natural monopolies. Since these Digital Utilities operate in an over-the-top manner, where they ride on regulated utilities but the apps themselves are unregulated, they pose a significant threat to India’s security and internal law and order. Digital monopolies that are originate from nations that pose themselves in an adversarial manner to India’s interests are especially worrisome. Among the top 20 apps used in India, one can easily identify TikTok, Likee, UC Browser, Helo, VMate ans ShareIT as apps that are present in most phones in India and that could easily by used to create inimical situations for India.

The impact of polices, regulatory frameworks and standards on technology sovereignty is critical for the growth of the Digital economy as well as the larger economy linked to the digital economy. Digital Economy permeates into all aspects of a modern society, from agriculture to education to health and industry. Therefore, it is imperative to have an appropriate policy framework for technology sovereignty, especially for the Digital Economy. India would need to gain technologies that are not necessarily Frontier Technologies but are critical from the perspective of Technological Sovereignty.

 

Scenarios of Covid recovery and path to growth

China Virus and its impact on Digital Economy

First published in StratNews Global https://stratnewsglobal.com/china-virus-and-its-impact-on-digital-economy/

As the China virus globally ravages people’s lives and the economy, and as more than 50% of the people on this planet are in a lockdown, the virus has had a deep impact on the digital economy. For starters, people have moved towards a more digital approach to work and life. A cultural change that would have required atleast a decade, if not more, has happened in a few weeks’ time.

As per Forbes, by March 25, internet usage had gone up by 70% in US. And this is mostly a pre-lockdown stage data. As per Ookla, the internet speed-test company, except for China, all countries had a significant dip in either their mobile internet speeds or their fixed line internet speeds or both, as more people suddenly started consuming more bandwidth. This shows the massive uptake of online activities post global lockdown.

The data also shows that perhaps China was already well prepared for the virus as it is the only country whose mobile internet and fixed line internet speeds actually went up considerably.  

Students (millennials) are now getting lessons online, which also implies that whenever they start going to school, and the school shuts for unforeseen reasons such as heat wave or pollution, students will continue with their classes online from home, seamlessly. The same applies to many professions and life in general, where online meetings, online business deals, online trainings, online concerts and webinars have all become much more acceptable. 

This is the shift that has led to increase of internet data consumption. Interestingly, the Internet Protocol was developed in a manner that it could survive a nuclear attack, where the internet gets splintered and can still function. Its robustness and reliability is now getting tested under a different kind of attack – a biological virus attack. Thankfully, the internet is being able to largely scale up, inspite of the significant increase in data consumption, thanks to all the video streaming applications such as software web conferencing to streaming movies and series.

The data usage is also reflected in the stock prices. Stock prices of software web conferencing company, Zoom, went up by 2.5 times since the pandemic started, and then dipped on revelations of the company routing calls and user data to China. Zoom was founded by a Chinese American. 

The crisis has also led to growth of other web conferencing software providers including recent startups such as Loom. There is an increased usage of document signing solutions such as DocuSign and HelloSign, whose usage is up by 5x. Even open source solutions such as FalsiScan has had a significant jump in usage. In fact most SAAS (cloud hosted) offerings has seen an uptick in usage.

However, the impact on hardware manufacturers, has been to say the least, hard. In India alone, mobile handset manufacturers stare at a Rs 15,000 crore production loss. There is similar impact on laptop and PC manufacturers. Atleast 2 month’s worth of sales has been impacted, and there is more expected due to the economy having an overall -5% to -6% contraction, accompanied with significant job losses. Needless to say, the stocks of hardware manufacturers globally is significantly down.

There has been similar losses for software companies that do not have SAAS based offerings, that is, their offerings are not hosted on cloud. It is ofcourse expected as with reduced sale of hardware, software sales will also have an impact.

However, one class of apps that are not tracked, and have shown significant uptake, are the predatory apps such as Bigo Live, Likee, TikTok etc. Bigo Live is a live streaming app that has recruiters hiring young women from across India and encourages them to titillate viewers at a cost and takes a high share of money that is earned. Likee is a similar app and both are Chinese origin with the money getting sucked out to China. TikTok is already banned by the US military but has proliferated even more during the lockdown. They pose myriad challenges, including potential honey-trapping in the military and violation of RBI norms.

But the hardest impact of the China virus has been the exacerbation of the digital divide. Those who are digitally enabled, are able to continue with their lives and their livelihoods in a significantly better manner than those who are not digitally enabled. Thus students who have access to the digital infrastructure, are continuing with their education as opposed to students in large parts of India, Africa and other places, who do not necessarily have the requisite digital infrastructure. Similarly, many of the white collared workers who are digitally enabled, are continuing to be productive, whereas blue collared workers are facing the prospects of loss of income and livelihood. The virus is ripping apart the social fabric which will have a deeper impact on the global economy in future, as the digital have-nots will not be able to compete in future due to lack of access, leading to lack of appropriate skills.