Hindustan Times: On tech, India was naive. It has finally woken up
The Chinese government banned Facebook in 2009. And even Mark Zuckerberg — despite having a wife of Chinese origin; learning Mandarin; and doing public relations stunts such as jogging in the smog-filled streets of Beijing to say how much he loved China — was not able to have it change its policy. Zuckerberg even went to the extent of creating new tools to censor and suppress content — to please the communists.
But the Chinese were smarter than he was. They saw no advantages in letting a foreign company dominate their technology industry. China also blocked Google, Twitter, and Netflix, and tripped up companies such as Uber. Chinese technology companies are now among the most valuable few in the world. Facebook’s Chinese competitor, Tencent, eclipsed it in market capitalisation in November 2017, passing the $500-billion mark. Its social media platform, WeChat, enables bill payment, ordering taxis and booking hotels while chatting with friends. It is so far ahead in innovation that Facebook is desperately trying to copy its features in the payment system it added to WhatsApp. Other Chinese companies such as Alibaba, Baidu, and DJI, have also raced ahead. Huawei has become a global threat with its 5G technologies and deep government links.
As I have mentioned before in these columns, the protectionism that economists have long decried — which favours domestic supplies of physical goods and services — supposedly limits competition, creates monopolies, raises costs, and stifles competitiveness and productivity. But that is not a problem in the technology world. Over the Internet, knowledge and ideas spread instantaneously. Entrepreneurs in one country can easily learn about the innovations and business models of another country and duplicate them. Technologies are advancing on exponential curves and becoming faster and cheaper, making them affordable to every country. Technology companies that don’t innovate risk going out of business because local start-ups are constantly emerging to challenge them.
Chinese technology protectionism created a fertile ground for local start-ups by eliminating the threat of foreign predators. The government selected what companies it could best control and gave them the advantage.
China actually learned some its tactics from Silicon Valley, which doesn’t believe in free markets either. The Valley’s moguls openly tout the need to build monopolies and gain an unfair competitive advantage by dumping capital. They take pride in their position in a global economy in which money is the ultimate weapon and winners take all. If tech companies cannot copy a technology, they buy the competitor.
And then there is data, the most valuable of all technical resources. Data analysis enables everything from micro-targeting of advertisements to voter suppression and population control. Mobile applications are the greatest spying devices ever invented, monitoring not only their users’ interests but also their locations, purchasing habits, connections, political opinions, and health.
That is why the top technology companies from both East and West, the monopolists and predators, see India as the juiciest of all spoils. It has a massive market ripe for the picking, and data gold mines. India has also been naïve in its data protection policies and support for domestic innovation; it bought the old propaganda about the need for open markets.
There are some big differences, though, between the Chinese and American companies that are vying for the Indian markets. The Chinese government largely controls the actions of its companies, feeds them resources and technologies it has stolen from the West. It gives them every unfair advantage so that it can steal more and subvert democracies. Silicon Valley companies want more data so that they can sell more products. They may show bad judgment and cross ethical lines, but they aren’t playing geopolitics or endangering the sovereignty of free nations.
This is why the Indian government’s decision to ban TikTok and other Chinese companies makes sense. What was long holding Indian entrepreneurs back was the lack of Internet connectivity and mobile phones. When these became pervasive, the foreign companies stepped in. Eliminating some of that competition will give Indian entrepreneurs a chance to build world-changing technologies. These will benefit not only India, but also the rest of the world, which is desperately looking for an alternative to Chinese influence and domination.
This is not to say that, without broad data and privacy protection policies, Indian technology companies won’t abuse the data that they gather. Such policies are needed as well. But the day politicians talk of breaking up companies such as Inmobi or Jio because they have become global monopolies and gained too much power will be the day of recognition that India has taken strides forward. Right now, what the country has to worry about is the dire threat from the East.