How India can lead the world into the Fourth Industrial Revolution

Be it AI or Blockchain, what works in India — with its inherent diversity, complexity and scale — will work in the world.

Back in the 20th century, I took my first driving lesson in Jaipur, Rajasthan. At the start of the lesson, the instructor declared that learning to drive a car in India will prepare me to do so anywhere else in the world, with ‘minor adjustments’.

Things may or may not have changed with respect to driving in India or elsewhere, but they have when it comes to technology. The advent of the Fourth Industrial Revolution has brought along an unprecedented confluence of interconnected technologies that are changing the way we live, work and organise our societies.

It provides, in equal parts, a massive opportunity to address pressing global challenges like ensuring food security, energy access and efficiency, and also the prospect of improving the living standards of billions of people. Deployment of these technologies, however, requires a concerted effort on the part of all stakeholders involved – government, businesses, innovators, intellectuals, and the people – to ensure that the outcomes are beneficial to the broader society.

India, with its inherent diversity, complexity, and scale, can provide the right laboratory for formulating policy responses to direct these technologies.

Artificial intelligence

Take for example artificial intelligence (AI). Many cutting-edge AI algorithms and machine learning tools are open source and publicly available. However, training these AI algorithms for specific purposes will require challenging problems to simulate, and large, diverse data sets to simulate those problems on. These data sets are expensive and difficult to obtain, mostly proprietary, hoarded by a few big technology businesses, and almost never shared.

While the United States has been funding large scale AI research, and China is amassing sizeable amounts of its own data, it is estimated that only 0.5 per cent of the available data in the world is currently being analysed. For AI to deliver on real life issues such as improving healthcare and well-being, innovative solutions and business models need to germinate from the bottom up, with access to reliable raw data that can help train these models.

India has a unique opportunity to design policy frameworks for promoting the democratisation and distributed ownership of such data that can drive innovation in AI at a large scale. For instance, if medical records from local diagnostic centres across India are fed into algorithms that can predict the probability of developing a disease, the regional, cultural, ethnic and socio-economic diversity of such medical data can allow for the delivery of customised and targeted preventive healthcare at a fraction of the cost.

Similarly, access to annotated behavioural data of 1.25 billion Indians across the 19,500 classified languages and dialects, nine recognised religions, and a variety of races, castes and sects, can open up a variety of possibilities to deploy algorithms on. Development of this data infrastructure, however, requires collaboration and coordination across policy makers, regulators, technologists and entrepreneurs, as well as data owners, providers and custodians.

Further, any policy stance on data ownership will need to take into account issues around data privacy, protection, security, and transparency. When these matters are addressed within the overall framework of the democratic governance structure in India, the resulting learnings and best practices can directly be ported to many, if not all of other countries, and can hugely accelerate global adoption and localised, targeted deployment of AI.

Blockchain

Another case in point is that of Blockchain or Distributed Ledger Technologies. The theoretical promise of this technology – immutable record keeping, decentralised decision making, transparency, fractionalisation of asset ownership, and elimination of intermediaries – can be applicable in a myriad of situations for a country like India where hard-wired structural issues such as information asymmetry, enforceability of contracts, corruption, black market and prevalence of middlemen plague the economy.

To illustrate, take a hypothetical example of a proposed public private infrastructure project – a new inter-state highway that will pass through an existing locality. Records of land ownership in the locality can be put on a Blockchain, and the investment proposal for the highway can be coded as a ‘smart contract’ for its terms, conditions and deliverables. The overall project value can be fractionalised and represented in terms of digital inter-state highway tokens to allow interested parties to obtain a stake in the project. These parties can comprise of the government, investors, developers, local politicians or public representatives, and the citizens and land owners of the locality.

The ‘smart contract’ can specify the ownership distribution and lock-in periods, and the criteria for sharing of returns (e.g. toll, commercial leasing) for investors, as per their holding of tokens.

Tokens can be allowed to be traded through the lifecycle of the project, and can be exchanged for real money, with full visibility on each party’s ownership. The resulting free market dynamics can create the right economic and incentive structure for all involved parties to ensure the project’s success and sustainability in the long run, and help raise the requisite capital and release funds as and when required.

An investor in the project will be more confident when he sees the policy makers already tied to the ‘smart contract’. The developer will have better visibility on the availability and pipeline of funds. The local politician will have a clearer sense of public interest in the project basis their holding or liquidation of the tokens, and can proactively plan and be accountable for clearing out any hurdles like land acquisition and clearances.

Once the project breaks even and the private investors have been paid back, the government holding of tokens can be permanently transferred to the local citizens for the long run – who can now not only ‘own’ a piece of the public infrastructure that was built for them, but also have an incentive to participate in its regular maintenance and upkeep – as the ongoing returns generate an additional source of income for them.

Overhaul of rules

At present, implementation of Blockchain across the entire spectrum in cases like the above is beyond the realm of possibility. It requires a fundamental overhaul of numerous rules, regulations, legal frameworks, and a change in the core fabric of how political structures, governance systems, and business processes are designed.

However, collated learnings from small pilots – conducted in different jurisdictions in India, together with a group of distinct stakeholders who may have distinct and divergent reasons, interests and incentives to change or to not change – can provide valuable insights into the incremental steps required to shape the evolution of this technology to serve our needs.

The mere presence of this open, distributed, decentralised technology is prompting the society to embrace the possibility of a disruptively different future. But the journey, encompassing planning, defining the trajectory and organising for this future, is a collective effort and responsibility.

Amongst many things that are made in India, the arbitrage has typically been on cost, efficiency, quality or aesthetic uniqueness. Development of global operating models and governance frameworks for emerging technologies requires arbitration on the diversity of data, complexity of situations, and scale of deployment.

There aren’t many other places in the world that can offer it more than India.