Tech’s democratising the world

An egalitarian movement is spreading across the globe. In an age where inequity has become a worrying issue, a counter-trend of democratisation of technology is allowing developing countries to fuel their growth with reduced hurdles.  

Here is something to celebrate. The fourth industrial revolution (4IR) has enabled emerging economies, developing countries and the poorest to have as much access to technology as the developed world. 

The monopoly of the developed world on controlling technology is collapsing even as emerging markets become far more self-dependent in knowledge creation and using technology for solutions unique to themselves. 

“Globalisation has intensified the diffusion of knowledge and technology across borders, helping to spread potential growth among countries and boost it at the global level. This productivity spillover is important because, until recently, the production of knowledge and technology has been concentrated mostly in a handful of large industrialised economies,” says the World Economic Outlook of April 2018, by the International Monetary Fund (IMF). 

This assertion by IMF is mostly based on the analysis of patent filing trends across the world. However, not all technology development is captured by patent filing. The access and ownership of technology is no longer about physical equipment and machinery with unique patented technology. 

The spread of 4IR offers equal access that has taken the focus from hardware to software. The rise of blockchain, internet of things, sensor technology, and artificial intelligence has enabled many researchers, companies and countries to create their own technology solutions. These technologies and platforms are not owned by any one entity. The solutions and products created may be owned, but the tools and ideas are based on open source concepts that allow egalitarian access. 

Companies like Google, Facebook and Microsoft may have strong presence in markets, but competition has mostly equal opportunity to develop their own competing ideas. The challenge with the big companies is their market distorting practices, not dominance or control of technology. 

The top 50 countries on the Bloomberg Innovation Index include several interesting countries. The US is no longer number 1, as South Korea has the spot. Tiny Singapore is ahead of giant Germany, among the leading five.

China, Malaysia, Turkey, Thailand and South Africa are rising in the list as they dislodge traditional leaders. The list of leaders in technology is changing rapidly. (India is not in the top 50 yet.)

At the Horasis Global Meeting, the changing equations of the global power list was recognised. Commissioners of the European Union and international business leaders felt that while globalisation has not achieved its potential, it needs improved rules, not rollback. The spread of technology is ensuring that inequality can be addressed. “Globalisation has many dimensions. Some are creating inequality, but the positive aspects of technology are allowing developing countries to compete well with advanced countries,” says Founder-Chairman of Horasis Frank-Jürgen Richter. 

Mohandas Pai, President of All India Management Association, makes a similar assertion. “We have to break-up digital monopolies. Now, emerging markets are investing in technology to challenge traditional powers.”

Technology-based solutions unique to India and China have shut out traditional technology giants of the US and Europe. India’s digital payments systems are now setting the standards for global players. In China, WeChat has moved far beyond the US-based WhatsApp messaging services. 

IMF endorses this development. “The evidence suggests that knowledge does not flow only in one direction. Technology leaders have benefited from each other’s research efforts and knowledge. With the growing contribution of China and Korea to the expansion of the technology frontier, one can expect positive spillovers from these countries to the traditional technology leaders. Alongside more traditional channels of gains from trade, the diffusion of knowledge and technology provides a powerful source of mutual benefits from globalisation.”

Big investors are helping the cause of making technology egalitarian, by investing in companies that are not under the influence of Silicon Valley. Innovation is thus going beyond the US-based investors and tech giants. Japan-based SoftBank has been focusing on emerging markets for investing its $100-billion Vision Fund. This fund has spent $30 billion mostly in Asian companies. Such fund flow is making it easy for Asian countries to support tech companies and solutions in new markets. The scale of such investment in Asia matches well with $33 billion raised by US-based VC companies in 2017. Resources are now equally available to developing countries as it has been for the developed ones. 

Start-ups and large companies in Asia can now scale and expand beyond their borders. Something that was earlier the preserve of the US and European companies. There is much to celebrate in this development. 

The author is an economic analyst and author of Kranti Nation: India and The Fourth Industrial Revolution. Views are personal.