‘Technology is now allowing nations to almost walk away from globalisation’

Why the title, The World is Vertical?
Globalisation’s design has been about integrating the entire world. Societies have been connected, economies have been connected, and financial systems have been connected. There has been tremendous benefit coming out of this, hundreds of millions of people have been lifted out of poverty. Except, three issues that have emerged. Number one, countries have felt that they’ve lost their sovereignty. Number two, countries have felt that they are unable to compete economically. And the third is that as traditional barriers disappear and as the world becomes more integrated, countries have felt they’ve lost their identity and culture. The status quo for many years has been that if you didn’t like globalisation, which was largely driven by the West, then you’re isolated. But then came technology — like 5G, AI, and cloud. With this, governments have adopted a new line of thinking: Why are we using someone else’s ecosystems, currency, software, and platforms? Technology is now allowing nations to almost walk away from globalisation. So, instead of the world being open and accessible as it has been for decades, it’s now full of these technology-based walls and barriers, a vertical border.

Is this a backlash against globalisation?
It’s not completely a backlash against globalisation. But it comes from the pendulum of globalisation beginning to swing in a different direction.

Is technology the primary catalyst for this shift?
In these recent years, there have been two catalysts. The first is the US-China rivalry. It’s very clear that the world is now dividing itself into regions that are aligned with China and those aligned with the US. Both are using technology to block each other in some form. For example, we’re seeing China essentially telling the entire technology world to not depend on US financial markets by not allowing their companies to list in the West. The second catalyst has been the pandemic, which has made countries realise that self-sufficiency, self-reliance, and localisation have to be priorities. And that thought is now being applied to technology.

How is this playing out?

Governments have realised that if they want to stay relevant, if they want to compete, if they want to have peace in the world, they will ultimately need to use technology to enforce their will. I would say that technology is giving countries a new way to enforce their will. Let’s take the example of global institutions. After the Second World War, the allies had the power to structure the post-war world. When we think about globalisation, all the big institutions that underpin it have been created by the US. Creating and naming the International Monetary Fund, or the World Bank were strategic moves by the Americans. They could have called it the American Monetary Fund, but they wanted to send a message that would involve the entire world, cueing their idea of globalisation. But now you have countries like the UK proposing institutions made up of 10 democracies that set the global rules for 5G as a counter to China. So, it’s not that countries are retaliating against everything about globalisation. Instead, countries now have ways to use technology to mould globalisation in a way that benefits them.

Where does India figure in this tech-sovereignty play?

India is an entire chapter in my book because it is one of the drivers of a vertical world. India has been talking about creating an open marketplace for data. It is being proposed because India doesn’t want foreign companies to dominate. It’s an extraordinary idea: Whether you’re Google, Facebook, or Alibaba — you have to share your data with local Indian companies. Or take for example the proposal from India for all drones to have a firmware update. Companies such as DJI have said they’re not going to do to update their drones as per Indian Government’s wishes. So, this has become essentially a way for India to stop the foreign domination of consumer drones.

What India is doing is creating a playbook for other countries who want to ensure that globalised technology does not create some sort of negative circumstances for them. That is why India has been aggressive on localising supply in e-commerce. There has always been a certain amount of hesitation towards foreign companies. A perfect example is Walmart, which struggled for years to open shop in India. This is now at play in technology as well. A key driver of the vertical world for India has been this rise in tensions with China, which made it take steps.