The Indian app ecosystem is set to transform on the back of the government's recent decision to curtail the presence of predatory foreign technology firms in the country.
Appreciating the value of a rule-based order in the digital world, India has recognised and acted on concerns over data protection and privacy. It is the first step in many that will help foster domestic entrepreneurship underpinned by sustainable, global free market principles. The commoditisation and exploitation of personal data is something of deep concern to states and citizens alike, yet regulation has not kept pace with the new challenges arising from evolving technologies and the asymmetric means of their dissemination. In many ways, the smokescreen created by the invisible nature of the cyberspace we are plugged into has impeded the creation of new, and enforcement of existing, data protection laws. What has become apparent to India and much of the free world, is that while the geopolitical spheres of influence in the real economy took decades to boldly define their contours, a corollary in the digital space will see a far shorter lead time. In the context of mobile apps, this piece will explore current cybersecurity challenges, the innovation ecosystem and areas of growth.
Last week, the mobile security firm, Lookout, published a report detailing how China, from as early as 2013, extensively used malware hidden in Android apps to hack into devices of Tibetans, Uyghurs and their sympathisers in over a dozen countries. Nondescript in appearance, these multi-language apps covered travel, pharmaceuticals, e-commerce, news feeds, keypads and music streaming, while covertly exfiltrating the data and harvesting it on a centralised control server. Similarly, ByteDance's TikTok was found to be lifting contents from iPhone users' clipboards globally, while the Chinese Communist Party's “Study the Great Nation” app turned out to be a study of the people of the nation, through widespread snooping.
Harnessing data for societal control and narrative setting while simultaneously monetising it through targeting commercial user preferences, has not been limited to state actors. The Cambridge Analytica scandal shed light on the role private firms play in the process of psychological profiling and undermining democratic principles for profit. While such data harnessing ignited a broader debate in the developed world on the perils of data misuse, the same cannot be said for digital surveillance programmes run by the state itself.
The general tendency for nations to engage with the world in a similar fashion as they do with their own citizens, raises further concerns for democracies which facilitate the entry of tech companies that are co-opted by, or even creations of, authoritarian regimes. Furthermore, state subsidies running into the billions to facilitate the Digital Silk Route by undercutting international free market competitors, are proving to be merely new age expressions of time-tested trade weaponisation measures, the negative externalities of which have become apparent today.
Firewalling its ecosystem for national security purposes will give a fillip to local talent which has been weighed down over the last two years by aggressive digital expansionism and digital “dumping.”
The government has taken cognisance of this. The Atmanirbhar Bharat App Innovation Challenge launched last week is designed to identify and help scale up existing apps and incubate new ideas. Covering e-learning, healthcare, agritech, e-commerce, news, gaming, social networking, entertainment and work from home technology, new initiatives now have the chance to gain state support.
With the push for self-reliance prodding Indian startups to create secure platforms to address domestic needs, founders can leverage an active network of developers that offers low-cost, high quality solutions. Average turnaround times are quick, enabling fledgling ideas to get off the ground fast.
From the early 2000s, Indian firms have provided support services to global companies for app development. Building on this over the years, a large ecosystem has been formed, assisted by a steady flow of tech-savvy human capital. Maintaining cost competitiveness while retaining an international presence meant that early movers like Konstant Infosolutions, Promatics, Auxano Global Services, [x]Cube Labs, amongst dozens of others, steadily consolidated their positions. The average India-made app still costs just 10-20 per cent of what it would in the US, and about 60-70 per cent of what it would in Eastern Europe.
Early stage investors are likely to take the risk to fund apps that replace blacklisted ones. Waterbridge sponsors the Fast Forward programme for startups and decides within days on seed funding for a 15 per cent stake. Meanwhile, traditional VCs are realigning their focus. Chingari, an Indian competitor to TikTok, that racked up 10 million downloads in a matter of days despite being initially riddled with bugs, is set to get capital allocation from a major VC. The road ahead will see high standards set for Minimum Viable Products as seed capital availability rises, giving birth to more platforms that have a sustainable, global reach.