While data is considered the new oil, unlike oil it is infinite in nature. And it should be treated thus by the government. A look at how the government can work with startups and corporates to make most use of data insights.Kazim Rizvi
The recent ecommerce policy has taken a conservative and tactical approach towards data generated from India. The tone of the policy suggests that data is a ‘natural asset’ that should be preserved and used for India’s advantage.
The policy mentions the word ‘data’ to describe raw, personal information as well as insights generated through processing of such raw information. Data, in its raw form, is not a valuable asset. The way raw data evolves from mere basic information to insights, trends, behavioural & activity patterns, really defines its journey from being merely a seed to a fully fledged tree that bears fruit to the farmer. Just like a seed and plant must be watered regularly, data requires a service and technology to evolve as genuine insights that could aid decision making and help drive revenue for those who process it.
The policy rightly identifies that data has played a key role in India’s growth story. But it’s not just about data. How data and insights have helped technology companies grow is just a part of the story. The real point lies in developing services for the Indian customer and providing an enabling platform for micro entrepreneurs to thrive. While doing so, companies collect and process data, develop better insights, and subsequently, provide better services.
This is how the cycle works.
A technology is first invented to solve a problem, data is subsequently collected for processing and improving the technology, which in turn develops insights. Such insights, therefore, are a unique, valuable asset to any company that generates it.
As such insights are neither generated for free, nor can they be created without the support of technology, it would be incorrect to attribute its custodianship to any community.
This brings us to the next fundamental issue - who is the rightful owner of data. The case around ownership of data must be settled once for all, that the citizen, the people, are the rightful owner of their data. My personal information belongs to me, and any processor, or fiduciary, is a mere custodian of my data. That pertains to both corporations and governments. And which is why data should not and cannot be shared without my consent.
On the point of community data, it appears that the government is seeking access to a host of insights generated through processing of multiple data sets. I am a frequent user of cabs as that allows me to work while on the move, helps me save time and avoid worrying about traffic. So clearly, I believe that the arrival of Uber and Ola is a value add for me, not just for my professional life, but also my personal health.
Having been a regular user of cab aggregator services for more than a year, I can safely assume that they would have great insights about my travel patterns, etc. Similarly, they would have such insights for millions of users, thereby developing even deeper understanding of the commuting patterns of city dwellers, what the busiest hours on the roads are, and the fastest and slowest routes in the city at any given point of time.
This level of depth did not come by mere collection of data, but by providing a service and developing the trust with the customers. Now, if the government assumes that it should seek access to such insights, without making the investments into the technology, and without providing the services, then the message they would send would be counter-productive. The entire concept of ‘community data’ as envisaged in the draft policy dilutes the spirit of innovation and competitiveness. It is to say that you can create any business model, and other players will eventually get access to it.
This is demotivating and will discourage innovation in India going forward. Data about a group of people is owned individually by those to whom it pertains, and not collectively.
For startups, this could have a catastrophic impact. Entrepreneurship is never a matter of choice, but an outcome of passion and a problem-solving attitude. Innovators and risk takers place a high bet on their skillset when they ride the entrepreneurial path. The return on investment for the risk undertaken attributes to revenue and the freedom to innovate.
India is fortunate to have a growing hub of tech startups in this emerging data economy. The concept of community data as envisaged in draft ecommerce policy is a threat to the freedom to innovate that propelled India as a global startup hub. If budding entrepreneurs know their innovation may not be protected and could be distributed, then why would they take the risk in the first place? Such policies therefore impact one of India’s greatest success stories of recent times, as it may lead to a drop in the number of risk takers, if the spirit of innovation is in any manner diluted.
This brings us to the next question - is data, like oil, a natural resource? The cliche of ‘data is the new oil’ is often oversubscribed by people to assume false ideas.
Unlike oil, data is man-made. Second, data is not a limited resource, unlike oil, which has an expiry date. Data, and the subsequent insights, are infinite in nature. It can be accessed, generated and developed into insights by any fiduciary that invests into technology and provides the right services.
Once a startup closes operations, their business insights based on data processing is usually deleted, unless they decide to sell their operations to another business. The transfer of insights is similar to intellectual property of any startup in such cases.
The last year or so has witnessed a number of policies that seek to prevent cross-border flow of Indian citizen’s data. It is assumed that storing data in India would lead to ‘data sovereignty’ that will protect this ‘national asset’ and provide India with a strategic and economic advantage. The spirit of ‘nationalism’ has certainly found its way into the data debate. This notion, however, is misleading, as the physical location of data has little to do with the objectives of economic and strategic gains, as well as access for law enforcement.
What India should be doing instead is incentivise startups and new tech to develop technologies that can process our citizen’s data by providing them with cutting edge, valuable services.
Through this approach, Indian companies will develop smart insights that could help them enhance decision making. Once the ecosystem of homegrown internet services develops and matures, it could create a thriving data economy in India. For India to take the leap towards becoming a major data superpower, innovation into high-end products and services that meets our societal challenges is the way to go about it.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)