The digital age has introduced a pivotal debate between centralized and decentralized systems. Centralized systems, controlled by single entities, offer the advantage of streamlined operations and seamless user experiences. In contrast, decentralized systems distribute control across multiple nodes or participants, emphasizing individual autonomy and resilience against single points of failure. The European Union (EU) and the United States (US) hold distinct positions in this discourse. The EU, with its stringent data protection regulations and push for digital strategic autonomy, leans towards decentralized models that prioritize user privacy and data sovereignty. Its Rhine model of digital capitalism underscores the significance of multi-stakeholder approaches and civil society's role in overseeing public digital services. Conversely, the US, home to most of the dominant Big Tech companies in the West, mirrors a centralized model driven by private interests and industry stakeholders. China, too, boasts a centralized ecosystem, but it's orchestrated top-down by public institutions with strategic rather than purely economic interests.
In the international geo-strategic arena, India is now emerging as a significant player. While it has developed centralized public infrastructures like Aadhaar, its approach to digital identity and payments is modular and open-source. This not only aligns with Europe's commitment to data protection but also presents a potential middle ground between the centralized models of the US and China. As India prepares to export its Stack, understanding its approach offers insights into a trajectory that harmonizes the advantages of both centralized and decentralized systems. It also aids in grasping the geopolitics of the digital landscape in the upcoming years.
Recently, the Philippines and Morocco built a unique identifier system based on India’s Aadhaar technology infrastructure. This solution is part of a software suite known as the Modular Open Source Identity Platform (MOSIP), which consists of a digital identity system (Aadhaar), a digital payment platform (Unified Payments Interface, UPI), and a digital locker system (DigiLocker). This suite has revolutionized daily life in India, particularly for the less affluent, by simplifying digital payments, providing digital identities, automating welfare subsidies, reducing corruption, and making the disbursement of emergency funds easier. This innovation could bring significant benefits to India’s IT industry, such as development and maintenance contracts.
However, there's also a geopolitical angle: By exporting this digital infrastructure model, the Indian government aims to enhance its global technological influence, targeting digital leadership in the global south. India hopes to position itself "as a neutral third force between the transactional West and an authoritarian China." Additionally, other countries, including Ethiopia, Guinea, Sierra Leone, Sri Lanka, and Togo, are utilizing or testing technologies and services from the India Stack. Intriguingly, India’s open-source approach aligns with Europe's commitment to data protection and open data initiatives.
In this potential alignment, both Europe and India could foster collaboration in several domains. To begin with, the development and promotion of open-source software platforms that prioritize user privacy and data sovereignty could help both regions achieve more self-reliance and strategic autonomy in the digital sphere. Europe's commitment to data protection and its Data Act aligns well with the need for safe and secure public digital infrastructure, such as India's. Second, India and Europe could join forces in providing technical assistance and capacity-building in developing countries, aiding these nations in building their own 'national stacks'—secure, interoperable digital public infrastructure. This could, in turn, promote a decentralized, self-reliant global digital ecosystem, taking advantage of the open-source nature of Web3 innovations. This could lead to increased earning capacity for local entrepreneurs and a break from the so-called ‘platform feudalism,’ where foreign platforms reap all the profits. Lastly, as global standards for digital identities, payments, data ownership, and data sharing become geopolitically interesting and technologically feasible for other countries to adopt, this could stimulate innovation in areas that require global collaboration and data, such as climate change, combatting terrorism, and resource allocation to transnational problems (e.g., poverty due to failed harvests). Therefore, India and Europe can offer a compelling, open-source, and self-reliant alternative to American and Chinese Big Tech platforms, contributing to a more diverse, resilient, and democratic global digital ecosystem.
