2007 was the inflection point for the IT industry. The high point of that year was the launch of the iPhone. This was soon followed by Android. This marked a beginning of the shift from enterprise to consumer. Since then smart phones have come to dominate. Today we have more smartphones than toilets in India. We have entered the FAAG age – Facebook, Apple, Amazon, Google. After Apple had dealt the first blow, the next one came from Amazon. AWS meant that hardware allocation could be done dynamically – and suddenly hardware became software. For an industry that grew up feeding the PCs and LAN networks, the absence of devices meant that programming skills now started becoming obsolete pretty fast. The hordes of programmers who were deployed to make networks secure started looking for something else to do – after some initial apprehensions, people came to trust AWS and Google as being more secure than their own devices and networks.
Facebook’s body blow was to relook how we communicated with each other. As the transition happened from Outlook to Gmail to Facebook, IT companies were at sea – trying to unlearn the rules of employee engagement.
Google’s punch to the IT industry came through being the champion of machine learning. What started as just intelligent text search went on to image recognition, machine translation and eventually machines that could do deep learning. Companies that had put in thousands of people to look after routine maintenance tasks found that they were being replaced by machines that could do the job much better and much cheaper.
With sensors directly talking to learning machines, we are now moving to an era where conventional roles of humans are being relooked. Whether it is machines that detect cancer based on pattern analysis, self-driving cars or community health programs where machines directly input height and weight measures into machines. With 5g rolling in, connecting these sensors to the internet will be much easier, as with good wireless speeds, wires will not be required – taking care of the last mile connectivity problem.
Nandan’s theme for the session was Aadhar. 400 million Aadhar cards are now linked to bank accounts, enabling a more leak-proof transfer of subsidies directly to these accounts. With subsidies being transferred directly, the market can then set its own price – leading to a higher degree of competitiveness for the Indian industry. This has already been done for the petroleum sector; the next challenges to be taken up are electricity and water. Another benefit that Aadhar has given the private sector is rapid authentication of customers. One of the key reasons for Reliance Jio to get to the 100 m user mark so rapidly was Aadhar.
And it is not just the private sector that has benefitted. Take an example of PDS schemes. The Andhra government has made its entire PDS system switch to Aadhar. In this process it detected 1 in 5 PDS users to be ‘ghosts’ – paper people whose existence lubricated all the hierarchy in the PDS system. So the first bonanza was that the base of PDS beneficiaries was now down by 22%! The 29,000 PDS shops in the state are all online now. In most states, a consumer is required to go to a specific shop in order to ger her supply of rations. The typical ration shop will serve its ‘loyal’ base of 400 consumers. The bargaining power is typically with the ration shop owner – who can make money by adulterating grains – or selling off the quota of grain / kerosene in the black market.
In the new Andhra system, consumers are free to get their quota of ration from any shop in the state. What this means is that there is competition now – hopefully weeding out shop keepers with notorious reputations. Not only is the consumer free to choose the shop, she is also free to choose any location that she wants in the state. This is a boon to migrant rural populations. In fact even partial withdrawals are allowed – which means that her husband in the city can consume 1/3rd of the quota – and the family back in the village can consume the rest.
Another interesting Aadhar related move is going to be the e-locker. What this means is that your certificates and licences need not be carried around. If a traffic policeman wants to know if you have a valid licence, all he needs is access to your e-locker in order to confirm that you have a valid licence. Am not sure how much the traffic cops will like this – given that their innate response in the first 2 minutes of an interaction is to first seize the licence – and then start negotiations!
Payment gateways are an on-going experiment. BHIM is an Aadhar enabed 2 MB app that has already had 20 m downloads. There is a version of BHIM which also works for non-smartphones, thereby omboarding the 350 m users in India who don’t have a smartphone. Aadhar Pay is now looking at direct debit of money by the merchant, even if the customer does not have a phone. Technologies like these are direct complements to low cost services. After all, we have seen the cost of delivering services online dropping by two orders of magnitude in the last decade.
Digital Indian is generating tons of data – also increasing the chances of misuse of data. Legally firms are on strong ground – most of us have on innumerable occasions ticked the ‘I agree’ checkbox without knowing what we have agreed to – consent fatigue. So what we need is firms that are morally accountable. At the same time, for the individual also this data is an opportunity. How can I use my data to better my own future?
Excerpted from a talk by Nandan Nilekani – May 2017