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Seven Countries Emerging as Frontrunners in the Fourth Industrial Revolution

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Finland, Switzerland, Sweden, Israel, Singapore, the Netherlands and the United States are leading the world when it comes to generating economic impact from investments in information and communications technologies (ICT), according to the World Economic Forum’s Global Information Technology Report 2016.

 

On average, this group of high-achieving economies at the pinnacle of the report’s Networked Readiness Index (NRI) economic impact pillar scores 33% higher than other advanced economies and 100% more than emerging and developing economies. The seven are all known for being early and enthusiastic adopters of ICT and their emergence is significant as it demonstrates that adoption of ICTs – coupled with a supportive enabling environment characterized by sound regulation, quality infrastructure and ready skills supply among other factors – can pave the way to wider benefits.

The breakaway of these seven economies is significant for other nations given the role that networked readiness is likely to play as the world transitions to the Fourth Industrial Revolution. The Global Information Technology Report 2016 finds high levels of confidence among business leaders that capacity to innovate is increasing, which suggests that other nations, too, could start to see more economic and social impact from ICT. However, on a cautionary note, the NRI data also suggest that individuals are driving ICT adoption much more enthusiastically than either governments or business, where no clear trends are discernible across regions since 2012.

Who leads the Networked Readiness Index in 2016?

The 2016 edition of the NRI finds Singapore as the highest-placed country in the world when it comes to networked readiness. Finland, which topped the ranking in 2014, remains in second place for a second year in a row, followed by Sweden (3rd), Norway (4th) and the United States (5th), which climbed two places. Making up the rest of the top 10 are the Netherlands, Switzerland, the United Kingdom, Luxembourg and Japan.

While the upper echelons of the NRI continue to reflect a strong correlation between networked readiness and per capita income, roughly 75% of the countries included in this year’s index show a score improvement in 2016. However, convergence both at the global and regional level remains elusive, with four regions – Eurasia, Emerging Europe, the Middle East, North Africa and Pakistan (MENAP) group, and sub-Saharan Africa – having widened the gap between the most and least networked-ready since 2012.

Elsewhere in the NRI, of the large emerging markets, Russia remains unchanged at 41st position. China comes next, moving up 3 places to 59th. South Africa improves markedly, climbing 10 places to 65th, while Brazil partially recovers from a previous downward trend to 72nd this year and India drops two places to 91st.

Europe remains at the technology frontier; seven of the top 10 NRI countries are European. Yet the performance range is wide, with Greece dropping four places to 70th position and Bosnia and Herzegovina closing the group at 97. Several Eastern European countries, notably the Slovak Republic, Poland and the Czech Republic, are making big strides, landing spots in the NRI top 50. Better affordability and large improvements in economic and social impacts are making major contributions to this success. Italy is another notable mover this year, improving 10 places to 45th position as the economic and social impacts of ICT are starting to be realized (up 18 in the global impact ranking).

The Eurasia region continues its upward trajectory, with the average NRI for the region increasing significantly since 2012. In particular, it is notable that the improvement is observed across all four elements that make up the index: environment, readiness, usage and impact. The region is led by Kazakhstan, which continues on its positive trajectory of recent years to land in 39th position.

Malaysia leads the Emerging Asian economies in 2016 and moves up one spot to 31st position overall. The country continues to perform strongly, supported by a government which is fully committed to the digital agenda. The top five in the region in terms of overall ICT readiness remain Malaysia, Mongolia, Thailand, China and Sri Lanka as in 2015. The group of Emerging Asian countries has been moving up and converging since 2012. Individual usage in the region is still one of the lowest in the world, but has been growing strongly in recent years.

The performance range by countries in the Latin America and Caribbean region remains widely dispersed with almost 100 places between Chile (38th) and Haiti (137th). There was no clear trend from 2015 to 2016 in terms of relative performance, with Chile and Haiti staying put and, of the remaining group, half of the countries improving their ranking and the other half dropping. Considering the absolute NRI score, however, the region has been moving up and converging since 2012. In order to foster the innovation forces that are key for thriving in the digitized world and the emerging Fourth Industrial Revolution, many governments in the region will urgently need to reinforce efforts to improve their regulatory and innovation environments.

The United Arab Emirates (26th) and Qatar (27th) continue to lead the Arab world in networked-readiness. In addition, the MENAP region (Middle East, North Africa and Pakistan) is home to two of the biggest movers in this year’s ranking: Kuwait (61st, up 11) and Lebanon (88th, up 11). In both cases, individuals are leading the charge, with the business sector catching up and strongly contributing to the successful performance. While governments are lagging behind in terms of digital adoption (Kuwait, 81st; Lebanon, 124th), the business community in both countries is registering an increased weight on ICT in government vision and efforts to improve the regulatory environment.

The NRI also sees several sub-Saharan African countries among the top upward movers, including South Africa (65th, up 10), Ethiopia (120th, up 10) and Côte d’Ivoire (106th, up 9). Leadership, in terms of digital adoption, is coming from different groups of stakeholders. While efforts are very much government-driven in Ethiopia and Côte d’Ivoire, the business sector is providing the most momentum in South Africa. The largest barriers to tackle for Côte d’Ivoire will be infrastructure and affordability; reversing the trend of a deteriorating business and innovation environment for South Africa; and boosting individual usage and skills for Ethiopia.

“The digital economy is an essential part of the architecture of the Fourth Industrial Revolution. In order for digital technology to continue contributing economic and social impact, societies need to anticipate its effects on markets and to ensure a fair deal for workers in digitized market environments. New models of governance will be key in this,” said Richard Samans, Head of the Centre for the Global Agenda, Member of the Managing Board, World Economic Forum Geneva.

“Cross-border data flows drive innovation and growth,” says Pastora Valero, Vice President of Government Affairs, Cisco. “The countries and companies innovating most prominently know that it is the free flow of ideas and information, which leads to improvements in processes and products. Initiatives to foster the free flow of data are crucial to supporting the global nature of the data economy.”

“Measuring the economic and social impact of the digital economy is important for making appropriate policy decisions in both developed and developing economies. The Networked Readiness Index is a valuable tool for helping public and private sector leaders in leveraging the potential of technology.” – Soumitra Dutta, Cornell University.

‘ “Digital” is not just about technology. It is a state of mind, and the source of new business models, new consumption patterns, new ways for business and individuals to organize, produce, trade and innovate. In the global game of digital innovation, the performance and progress made by emerging economies such as Singapore, the United Arab Emirates or South Africa for example are remarkable: they may hold the promise of even more spectacular improvements in the ways digital technologies will be harnessed to competitiveness, growth and social progress in the coming years.’ – Bruno Lanvin, INSEAD.

In addition to providing insights into countries’ performance in the unfolding digital revolution, the report notes a number of trends across ICT adoption in 2016:

How much innovation is “digital”? As the global economy becomes increasingly digitized so, it would seem, innovation is becoming much less defined in a narrow technological sense. For example, while the report finds business model innovation on the rise in more than 100 countries, it also finds stagnation in the Business Usage pillar. This would suggest that while innovation is a top priority for many businesses, they are still missing out on opportunities for greater impact through ICT adoption.

Patents are declining as a measure of innovative capacity: While the minds of business executives around the world are increasingly focused on innovation, traditional measures for innovation such as the number of patents registered are telling a smaller and smaller part of the story. This may be related to the fact that the current transformation is nurtured by a different type of innovation, increasingly based on digital technologies and on the new business models it allows.

The ICT infrastructure gap remains a chronic challenge and is getting wider: Of the 12 pillars of the report, infrastructure is the one where improvement is least pronounced. Worse, since 2012 the lowest-ranked countries have been reporting a deterioration in their infrastructure in absolute terms. Infrastructure is a key determinant of a nation’s ICT-readiness alongside affordability and skills, acting as a gateway to increased usage and ultimately economic and social impact.

Social impact needs new momentum in important areas but is picking up overall: While the social impact pillar of the NRI has seen positive change overall since 2012, most regions register a decline in one of its important components, the impact of ICT on government efficiency. Another important social impact indicator, ICTs and access to basic services, is starting to recover in 2016 after years of decline. This suggests that more people are feeling the benefits of online access to healthcare, finance, insurance and other services. Social impacts on the whole rose most strongly in the group of high-income countries over the year.

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160 million degrees Celsius reached in China: The artificial Sun

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Experimental Advanced Superconducting Tokamak (EAST) /VCG Photo

Another important step has been taken by Chinese researchers in developing the ultimate energy source for nuclear fusion.

On May 28, the Experimental Advanced Superconducting Tokamak (EAST), known as the “artificial sun”, operating at the Institute of Materials Science in Hefei (Chinese Academy of Sciences), achieved the new limit of the planet reaching the highest temperature ever recorded.

It reached one hundred and twenty million degrees Celsius, for one minute and 51 seconds. EAST also managed to maintain a temperature of 160 million degrees Celsius for 20 seconds. This is a higher peak than that of the sun’s core, which can reach a limit of 15 million degrees Celsius.

A tokamak (Russian: toroidal’naja kamera s magnitnymi katushkami: Russian acronym for “toroidal chamber with magnetic coils”) is a device which uses a powerful magnetic field to confine plasma in the shape of a torus. Torus is a ring-shaped device in which a hot, rarefied gas (usually hydrogen, in the plasma state) is kept cohesive and away from inner walls by a magnetic field created by electromagnets outside the chamber. It was originally conceptualized and invented in the 1950s by Soviet professor Sadyk Azimovič Azimov (1914-88) and others at the Kurčatov Institute in Moscow.

China’s experimental nuclear fusion device was created in 1998 and was called HT-7U at the time. With a view to making it easier to pronounce and remember, as well as having a precise scientific meaning for national and foreign experts, HT-7U was officially renamed EAST in October 2003.

In 2006, the EAST project was completed in a definitive and higher quality manner. In September-October 2006 and in January-February 2007, the EAST device performed two discharge debugs and successfully achieved stable, repetitive and controllable high-temperature plasmas with various magnetic configurations.

EAST has a nuclear fusion reaction mechanism similar to that of the sun. Its operating principle is to add a small amount of the hydrogen isotope deuterium or tritium to the device’s vacuum chamber and generate plasma through a transformer-like principle, then increase its density and temperature to cause a fusion reaction – a process that generates enormous energy.

Over the ten years since its construction, EAST has continually made progress in the search for controllable nuclear fusion.

In 2009, the first round of EAST tests was successful, thus putting China at the forefront of nuclear fusion research. In February 2016, EAST’s physics tests made another major breakthrough, achieving the longest temperature duration reaching 50 million degrees. In 2018, EAST reached a number of important milestones including 100 million degrees.

This means that mankind has made another major advance in its efforts to turn nuclear fusion into new, clean and inexhaustible energy.

Energy is the fundamental driving force behind the functioning of every aspect of life. The energy used today has many shortcomings and cannot fully meet human needs, while nuclear fusion energy is considered the ideal energy par excellence.

According to calculations, the deuterium contained in one litre of seawater can produce the equivalent of the energy of 300 litres of petrol, released after the nuclear fusion reaction, besides the fact that the product is not harmful. Although it is not a “perpetual motion machine”, nuclear fusion can provide energy for a long time. Not only can Marvel’s hero Iron Man rely on the small reactor in his chest, but also raw materials can be obtained from seawater at an extremely low cost.

The first condition for nuclear fusion is to keep fuel in the fourth state of matter, after solid, liquid and gas – i.e. the plasma state.

When the plasma temperature reaches tens of millions of degrees Celsius or even hundreds of millions of degrees, the atomic nucleus can overcome the repulsive force to carry out the polymerisation reaction. Coupled with sufficient density and a sufficiently long thermal energy confinement time, the nuclear fusion reaction is able to continue steadily.

Nevertheless, it is particularly difficult to achieve both the temperature of hundreds of millions of degrees Celsius and the long-term confinement control of plasma stability.

While recognising that nuclear fusion is the ultimate goal for solving the problem of mankind’s future energy, there is both cooperation and competition in international research.

A sign of cooperation is that on July 28, 2020, a ceremony was held in France to launch the major project to install the International Thermonuclear Experimental Reactor (ITER). The ITER project is jointly implemented by China, the Republic of Korea (South Korea), Japan, India, Russia, the European Union and the United States.

On December 28, 2020, Seoul’s Korea Superconducting Tokamak Advanced Research (KSTAR) set a new world limit at the  time and its ionomer maintained a temperature of over 100 million degrees for 20 seconds.

In early 2018, the Plasma Science and Fusion Center at the Massachusetts Institute of Technology had begun designing and building a Soonest/Smallest Private-Funded Affordable Robust Compact fusion reactor more advanced than ITER, with a volume tens of times smaller and significantly reduced in cost. But it remains to be seen whether this goal can be achieved.

Chinese researchers have now achieved significant progress in this field and taken another important step towards obtaining energy from nuclear fusion.

In the future, if the production capacity and energy supply of the “artificial sun” is achieved, it will be another technological revolution that can promote social progress even more than the industrial revolution which, in fact, meant the beginning of pollution for the planet and exploitation by capital.

Although there is still a long way to go before the construction of the naval port on Jupiter described by the Chinese writer, Liu Cixin, in his novel The Three-Body Problem (San Ti), mankind is indeed advancing on the road to controllable nuclear fusion.

Nuclear fusion energy has exceptional advantages in producing rich resources, as well as no carbon emissions, so it is clean and safe. It is one of the ideal energy sources for mankind in the future, and can contribute significantly to achieve the goal of eliminating said carbon.

The two greatest difficulties in generating energy from nuclear fusion lie in regularly reaching hundreds of millions of degrees, and in stable ignition and control of long-term confinement.

For the time being, multiple extreme conditions are highly integrated and organically combined at the same time, but this is very difficult and challenging.

In hitting the record, it is the first time that the EAST device has adopted key technologies such as the first water-cooled all-metal active wall, as well as the high-performance tungsten deflector and high-power wave heating states.

At present, there are over 200 core technologies and nearly 2,000 patents on EAST, bringing together cutting-edge technologies such as ‘ultra-high temperature’, ‘ultra-low temperature’, ‘ultra-high vacuum’, ‘ultra-strong magnetic field’ and ‘ultra-high current’.

The total power is 34 megawatts, which is equivalent to about 68,000 domestic microwave ovens heating up together. For 100 million degrees Celsius and -269 °C to coexist, it is necessary to use “ultra-high vacuum” with an intensity of about one hundredth of a billionth of the surface atmospheric pressure suitable for insulation. With a view to supporting this complex extreme system, almost a million parts and components work together on EAST.

The new EAST record further demonstrates the feasibility of nuclear fusion energy and also lays the physical and engineering foundations for marketing.

Energy on earth, stored in the form of fossil fuels, wind, water or animals and plants, originally comes from the sun. For example, fossil fuels evolved from animals and plants millions of years ago, and their energy ultimately comes from solar energy stored by the photosynthesis of plants at the base of the food chain. Therefore, regardless of the type of energy used by humans, they ultimately use the sun energy that comes from nuclear fusion.

If mankind could master the method for releasing the nuclear fusion energy in an orderly manner, it would be equivalent to controlling the sun energy source. Therefore, this is the reason why the controllable nuclear fusion reactor is called the “artificial sun”.

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Personal Privacy and Sovereignty in Social Networks

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Discussions about privacy and personal sovereignty in social networks should start with general questions. What is privacy in the context of the human presence in cyberspace? What constitutes personal sovereignty in the digital world? Could a social network have something like sovereignty? Who will defeat whom – a whale or an elephant – if a whale is a network, and an elephant is a state?

We know that the inviolability of private life is a fairly traditional, “analogue” human right, which is guaranteed by the constitutions of many countries throughout the world, including Russia. But in the digital world, in particular in social networks, the “analogue” right to privacy is being transformed into a “digital” individual right, which in reality depends on its recognition by the state, the operator of the social network and the person himself. In turn, both the social network and the person have some signs of sovereignty in cyberspace, and in this regard, they become like the state, almost on the same level, which leads to the emergence of inevitable interactions between them. Much depends on how such “digital” human rights and interactions are regulated in reality, rather than just on paper. Here I mean the inviolability of the digital personality, the right to be forgotten, the right to access information technology, etc.

All these rights are included in a certain commonality, which can be conditionally called the sovereignty of an individual. What constitutes the sovereignty of an individual? First, the recognition of one’s inherent dignity, which, as stated in the preamble to the Universal Declaration of Human Rights, is related to “all members of the human family”. Second, as the Constitutional Court of the Russian Federation points out, Chapter 2 of the Constitution of the Russian Federation imposes on the state not only the passive duty of abstaining from interfering with the freedom of the individual, but also an active (positive) duty to provide assistance in the practical implementation by an individual of his rights and freedoms. The list of these rights is extensive. However, keeping in mind the topic of our discussion, we will highlight those that are most important for a person in the environment of social networks and Big Data: the right to access the Internet, the right to personal data, the right to be forgotten, the right to access Internet technologies, the right to refuse Internet technologies, the right to mental inviolability, digital privacy, the right to a name, to an image, etc.

In cyberspace, a sovereign person collides with other sovereign entities, and, above all, with the state under whose jurisdiction he resides. State sovereignty, according to the classical doctrine, consists of the supremacy, independence and completeness of state power on its territory. According to the Constitutional Court of the Russian Federation, the territorial supremacy of state power is expressed in the fact that no other power is allowed within the territory of the Russian Federation, which could exist along with it or outside its control. In this regard, it is quite logical to include in this scheme the so-called sovereign Internet, which, like a certain lagoon, can only be separated from the ocean not by a sand spit, but by the insurmountable barrier of the state border.

A sovereign person also collides with network sovereignty. Does it really exist? There may be different opinions on this issue, but in any case, social networks have certain features of sovereignty. Within the network, the power of its administrator (operator, owner) is characterised by completeness, supremacy, and independence. It has its place in cyberspace, which is like a territory. It also has its own population – users. All of them have accepted user agreements, thereby, entered into the “citizenship of the social network” and pledged to obey these agreements.

At the same time, the social network has properties that the state does not have: a transboundary nature, anonymity, public accessibility, and technological unity. Each of these characteristics deserves a separate analysis.

The transboundary nature of the Internet and, consequently, social networks creates a situation where they exist, so to speak, in parallel with the state, since there is no state territory in cyberspace. However, the people, as noted by the Constitutional Court of the Russian Federation, form the physical substrate of the state and are identified with the concept of “citizens”; they, in turn, may be users of a social network. Inevitably there must be certain interactions between the social network and the state.

In a sense, the state and the social network compete in extending their sovereignty over the individual. But if the state, according to the Constitution, is obliged to recognise, observe and protect human and civil rights, then the network does not have such an obligation. It imposes responsibilities through the user agreement. Here, too, it resembles a state, which, with the help of laws, self-obliges itself to respect the rights of the individual.

The range of possible options for interactions between the state and the social network is extremely wide: from disregard, which was typical at the time when social networks began to appear, to prohibition and blocking; from soft, compromising regulations to harsh ones. However, the resolution of the conflict with the help of national legislation bumps into the cross-border activity of social networks. In particular, what is an offense in some countries may not be considered an offense in other countries, which means that the imposed restrictions and sanctions against users may turn out to be just, legal and justified in some countries, and illegal, unreasonable, and infringing on the rights and legal interests of users in other countries.

Let’s consider two options for the legal regulation of social networks, implemented in the European Union and the United States. The EU Regulation on Combating the Dissemination of Terrorist Content Online of March 16, 2021, obliges hosting providers to remove illegal content or restrict access to it within an hour after receiving an order from the competent national authorities. In other words, firstly, the obligated subject is not the owner (operator, administrator) of a social network, but a hosting provider that provides services on the territory of a particular EU member state. Secondly, the duty is not to monitor user accounts, but to comply with the requirements of the supervisory authority of the relative state.

In contrast, the US 1996 Communication Decency Act, Section 230 (c) does not impose any obligation on the hosting provider, owner, operator, or administrator of a social network. According to this regulatory legal act, any provider, and therefore the owner (operator, administrator) of a social network is released from responsibility for blocking and deleting materials that the provider considers obscene, depraved, rude, too cruel, harassing or otherwise. So it follows, that the provider has the right, but not the obligation to monitor user accounts. At the same time, he is released from responsibility both for removing or blocking content that he himself considers illegal, and for not removing or blocking content that the state considers illegal. In other words, the provider, on the one hand, is endowed with the rights of the editor-in-chief of the media in relation to user accounts (the right to remove any content), and on the other hand, he is discharged from liability for the content in the user accounts, since he is not an “editor-in-chief” or “publisher of the entire social network, but only “the owner of the fence on which the ads are posted”.

The models are different: in one case, the provider is obliged to comply, in the other – he has the right to take measures to restrict the dissemination of information. The goals are also different: in the first case, we talk about the idea of terrorist content, in the second case – about the free discretion of a bona fide provider, whom the American law compares to the “good Samaritan”. By the way, recently the Communication Decency Act rules were discussed in one of the US Congress committees, where they caused a deep split between Democrats, who demanded more censorship of dangerous and fake content, and Republicans, who opposed internal censorship in the networks.

Comparing the Russian domestic legislative innovations of December 30, 2020, one cannot fail to notice the bifurcation in the will of the legislator. The new version of the federal law “On information, information technologies and information protection” obliges the owner of the social network to monitor and block accounts, that is, to simultaneously act as the editor-in-chief of the media and Roskomnadzor. On the contrary, the new version of the federal law “On measures to influence persons involved in violations of fundamental human rights and freedoms, rights and freedoms of citizens of the Russian Federation” prohibits network owners from blocking user accounts under the threat of reprisals against the network as a whole.

The formulations used in the laws create a paradoxical picture. For example, a user writes on Twitter that someone is a bastard because he lives in Chertanovo district and works at the Zhilishchnik state budgetary institution. If the owner of Twitter does not restrict access to such an account, he will break the information law, and if he does, he will violate the law on measures to influence.

At the same time, the question of the limits of national jurisdiction on the Internet is quite interesting. The EU regulation states that it should apply to all providers that meet two criteria: first, the provider allows individuals or legal entities in one or more EU member states to use its services and, second, the provider has a significant connection with these countries. In turn, a significant connection is confirmed by the fact that the provider is established in the EU, provides services in the EU and its activities are aimed at the EU countries. The latter circumstance can be confirmed, in particular, by such signs as the use of language or currency, the possibility to order goods and services from the EU, presence in the national app stores, and the provision of local advertising.

The Russian domestic legislator also uses some of the listed criteria for the national localisation of an information resource, but inconsistently and haphazardly. Thus, in the law on information the language and advertising are used in relation to social networks and news aggregators, and in relation to search engines and audiovisual services – only the orientation of advertising. At the same time, nowhere can find by what indicators it is possible to determine the orientation of advertising.

So, let’s summarise. First, the choice of a person between the sovereignty of the state and the sovereignty of the network is illusory, because a person is always within the limits of state sovereignty – either by virtue of being in the territory, or by virtue of citizenship. Second, the network presumes the legal capacity and relevance of its users and keeps aloof, within the limits determined by itself, from restricting freedom of thought and speech, the right to information, freedom of conscience, freedom of creativity, etc. Third, guarantees of rights recognised by the state for a person can become a reality on the network only if the network has self-commitments, which can be the result of either a global conventional solution or legislative consolidation at the national level of adequate rules for the regulation of social networks. I would like to note that back in 2010, the relevant committee of the State Duma discussed a bill that was proposed by our UNESCO Chair. It was designed to conceptually solve these problems, but the legislator went along the path of creating the so-called “Law on bloggers”, which, as you know, ended in a fiasco.

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Russia and India: Natural Partners in Building a Digital World

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Much as for today’s Russia, digital transformation has been one of the priorities for India’s government, its entrepreneurs and the civil society. Despite the turmoil caused by the pandemic, the changes on the path of digitization taking place in Russia and India open up new opportunities for cooperation between the two countries and pose new problems.

Given that forecasts of India’s economic growth are again—as it happened a year ago—downgraded, and the footage of today’s tragic situation in the country dominates TV screens, it is difficult to believe that a significant part of the positive transformations of recent years in India has to be attributed to the technological progress of the Fourth Industrial Revolution, the expansion of knowledge economy and a rapid digitization. However, this remains the case, and a study published recently by the SKOLKOVO Institute for Emerging Markets Studies in cooperation with the Indian School of Business focuses on the digitization aspect of the profound transformation that extends to the Indian economy and society as a whole.

The research report “India Goes Digital. From a local phenomenon to a global influencer” examines the main distinctive features that, as the authors argue, make India’s digitisation profile unique. They include both fairly well-known aspects, such as the system of biometric identification of citizens operational in India, as well as less familiar features, including a close partnership between the state and private businesses in designing and implementing digitization programmes, their impact on the increasing financial inclusion as well as the boom of entrepreneurship, which is also largely associated with the rapid proliferation of digital technologies in India.

The study also examines the impact of digitization on the education sector, critical to India’s development. It explores the great potential that India’s educational companies have; after all, as of today, they are the fastest growing in their segment on a global scale, seeking international expansion, which makes quality education more accessible and effective for both developing and developed countries.

The study provides insights into the companies, institutions and entrepreneurs that make up the emerging digital India. In the segment of the study concerning Russian-Indian cooperation, the authors analyze the experience of Russian businesses in India and argue that it is necessary to strengthen the technological segment within the strategic partnership between Russia and India, which is not only dictated by the present-day requirements but also has a very significant potential.

The Russian-Indian partnership in the era of digital transformation

In 2020, Russia and India celebrated 20 years since the Declaration on Strategic Partnership was signed in New Delhi by Prime Minister Atal Bihari Vajpayee and President Vladimir Putin in October 2000. In December 2010, the India-Russia partnership was upgraded to the level of a special and privileged strategic partnership. In April 2019, President Putin signed an executive order, awarding Prime Minister N. Modi the Order of St. Andrew the Apostle the First-Called for his distinguished contribution to the privileged strategic partnership between Russia and India and fostering friendly ties between the Russian and Indian peoples. The strategic status of relations is not exclusive for both countries; however, a profound mutual understanding on most of the issues on the contemporary and historical agendas is a unique feature of the Russian-Indian relations. The annual meeting of the leaders of the two countries did not take place in 2020; however, the next face-to-face summit is reportedly planned for 2021. The views of Moscow and New Delhi on the geopolitical situation in the two most important macroregions—Eurasia and the Asia-Pacific—where both Russia and India play an important role and where the two countries seek to smooth out the emerging divergence in approaches to their future deserve a separate analysis.

In April 2021, it was announced that a “two + two” dialogue with the participation of foreign and defense ministers would be established between Russia and India. India is already working with the United States, Japan and Australia in the same format.

In addition to the strong political ties, traditional cooperation in the energy sector, as well as military-technical partnership, is particularly prominent and important for both India and Russia. In September 2019, Prime Minister Narendra Modi was the chief guest at the 5th Eastern Economic Forum in Vladivostok. The Russian Far East, a vast territory designed to become Russia’s new gateway to Asia, is open for Indian business, striving to become one of the new engines for the development of the Russian-Indian ties.

The planned Vladivostok-Chennai maritime corridor will become an important new transport link connecting the Russian Arctic and the Far East with India. In this regard, the energy bridge between the two countries, which implies trade and investment in oil and gas, LNG, nuclear energy, coal mining and processing, will certainly expand, given the natural complementarity of the economies of the two countries. Cooperation in the field of renewable energy, on which India puts a clear premium, and in the hydrogen economy, are also under discussion. The co-production of COVID-19 vaccines is an important recent addition to the list of priority areas for bilateral collaboration.

Besides, Moscow and Delhi intend to expand military-technical cooperation using the advantages of localization within the framework of the “Make in India” and AtmaNirbhar Bharat (“Self-Reliant India”) programmes that are actively promoted by the Indian government and personally by PM N. Modi.

However, for various reasons, as is well-known, economic cooperation between Russia and India lags behind the level of their expanded political partnership. In 2019, Russian-Indian trade turnover amounted to $11.16 billion (while Russian exports to India amounted to $7.24 billion, India’s exports to Russia amounted to $3.92 billion). Before the pandemic, the governments of the two countries set a goal to triple their trade turnover to $30 billion and to increase bilateral investments from $30 to $50 billion by 2025. N. Modi and V. Putin identified the intensification of trade and economic relations as a priority area of bilateral cooperation. The establishment of a free trade zone between India and the Eurasian Economic Union (EAEU) is being considered.

Governments of India and Russia were tasked with identifying and removing the bottlenecks and obstacles to expanding economic ties. Russia’s Ministry of Economic Development and India’s Department of Industrial Policy and Promotion have launched fast-track, single-window mechanisms to facilitate smooth investments by Russian and Indian companies. “Invest India,” an investment promotion and facilitation agency, established a special Russia desk to provide Russian businesses with a convenient platform for support and advice on investment issues. The Far East Investment and Export Agency, the Russian Export Center, Delovaya Rossiya, as well as the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI) and other organizations promote direct contacts between Indian and Russian business communities. Two rounds of strategic economic dialogue took place between India and Russia: in St. Petersburg in 2018 and in New Delhi in 2019.

2020 was the year of Russia’s BRICS chairmanship, and despite the fact that the BRICS summit, like all other work, had to be held remotely, Russia tried to make the content of this work most up-to-date and relevant to today’s requirements. Thus, the topic of cooperation between the BRICS nations in digitalization-related areas was reflected in the 12th BRICS Summit Moscow Declaration adopted at the meeting. In the new Strategy for BRICS Economic Partnership 2025, one of the three main directions identified was—for the first time—cooperation in digital economy. 2021 is the year of India’s chairmanship in BRICS, meaning that the topic of digitalization, which is very close to India, will undoubtedly find further reflection in the work of the grouping. In recent years, India has made tangible progress in promoting Internet penetration, digital literacy, e-government, financial technology, e-commerce and so on.

Digitalization as Russia’s top priority

Digital transformation is now one of the top priorities for Russia as well. This was reflected in the appointment of Mikhail Mishustin as Prime Minister of the country in January 2020. Speaking at the State Duma in 2020, M. Mishustin noted: “Digital is the oil, gold and platinum of the 21st century. If we do not get digital, digital will get us.” Prior to his appointment as Prime Minister, M. Mishustin headed the Federal Tax Service of Russia, where he managed to overhaul the work of this department on a completely new digital foundation and in a rather short time span. Russia has developed the National Technological Initiative (NTI), a long-term programme aimed at ensuring the leadership of Russian companies on new high-tech markets that will emerge in the global economy during the next 15-20 years.

Like India, Russia is now preparing to test and deploy 5G networks. The national “Digital Economy” programme (planned up to the year 2030) is currently under implementation. NTI and Russia’s other efforts in the technological field can be coordinated with the strategic plans of India in similar areas.

Complementarity and new cooperation avenues

So far, India’s experience with digitalization is not well-known in Russia. With some exceptions, Russian businesses are largely unfamiliar with the changes taking place in India. Although Russian and Indian IT-industries have evolved differently, new complementarities and new opportunities for collaboration between them are emerging. It is noteworthy that the Russian Association of Software Development Companies RUSSOFT, founded in 1999, was created following the example of the Indian National Association of Software and Service Companies (NASSCOM). Today, companies, such as MaximaTelecom (solutions for digital cities and businesses), Lighting Technologies (lighting systems for smart cities), Technonicol (advanced building materials), Zyfra (artificial intelligence and industrial solutions based on the Internet of Things), Tactise Group (advanced solutions in the field of labour protection and industrial safety), as well as state giants such as Rosatom (India’s key partner in the nuclear industry), are actively involved in India’s innovative development path.

However, there exists great potential for expanding this list. Despite severe competition with both Indian and international players, solutions from Russia are in demand, Indian businesses and the national government are willing to work with Russian companies in their own interests, regardless of possible pressure from the outside. Several investment funds are also working with India, building bridges and striving to blend Russian, Indian and international experience. These include Sistema Asia Capital, RTP Global, DST Global. These are experienced tech-savvy investors, representing “smart money”, equipped with the knowledge of working with complex markets, such as India.

The two countries have the potential for cooperation in deep technologies, such as artificial intelligence, big data and analytics, machine learning, smart energy infrastructure, smart logistics, photonics and new materials, microelectronics and semiconductors, as well as blockchain and financial technologies. An important element of support from the governments on both sides could be the establishment of so-called regulatory sandboxes—so that experimental legal regimes could facilitate cross-pollination and testing of ideas between technology companies and start-ups from India and Russia.

Amid today’s realities, India cannot be solely viewed as a potential sales market. It is necessary to work with India as a valuable partner. India welcomes foreign businesses that help address its challenges without aggravating the country’s problems (in particular, unemployment and environmental degradation). India offers incentives to localize production and has unique experience in scaling low-margin products and services. Importantly, Indian businesses are going global very actively and can serve as a springboard for Russian solutions to enter international markets.

Another potentially important area of cooperation between India and Russia is cybersecurity. In the rapidly unfolding digital world, the environment where people and businesses operate is becoming increasingly permeable, while the space that needs protection is more and more difficult to delineate with a security perimeter. Securing critical infrastructure will require new approaches and principles that may be based on quantum technologies and quantum cryptography. Currently, a national cybersecurity strategy is under development in India, and the country is facing regular cyber-attacks on its infrastructure, which Indian regulators, knowing the complexity and ambiguity of this topic, rightly avoid attributing to any specific groups of cybercriminals or naming their origins. At the same time, India’s Western partners rush to attribute these attacks to China or North Korea.

Against the backdrop of the global pandemic crisis, the dangers associated with high technology seem to have receded into the background. However, there is no doubt that the pandemic has significantly accelerated digitalization; and in the new digital world, national independence and sovereignty of countries are becoming more dependent on technology than ever before.

Over the years, Russia has consistently advocated for a broad international consensus under the auspices of the UN to work out the principles of international law to govern cyberspace. Meanwhile, in response to growing digital threats and in the absence of comprehensive international regulation, cyberspace is becoming increasingly regional. In a newly evolving international environment, there are likely to be several technology clusters, each with their own security principles. It is in the interests of both Russia and India to agree on these principles at an early stage, so as not to find themselves on different technological continents in the near future.

Given the constant and consistent striving of both countries for sovereignty and adherence to international law and the principles of non-interference in the internal affairs of other countries, Russia and India are natural partners in the formation of a new digital world, and if their efforts are intensified, this will stand to benefit not only the two countries but also the international community as a whole.

In line with global trends and reflecting the accelerating technological transformation within India, the Indian Ministry of External Affairs announced in 2020 the creation of the New and Emerging Strategic Technologies (NEST) department that will deal with technology diplomacy, foreign policy and international legal aspects of the new technologies. This is expected to enable India to become more involved in the global debate on technology governance and to better advocate for the country’s national interests in this context.

From our partner RIAC

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