[#8] Reimagining Governments as Platforms
India has the only "public" platform in the world with a billion plus users
Authors’ Note
Welcome to all the 100 new members who’ve subscribed after reading our two part deep dive on Platforms. In case you haven’t read them yet & would want to read them, here they are - Part 1 & Part 2. And if you’re specifically looking for some other recommendations, here’s a piece on how Indian startups could evolve into innovation platforms that we think a lot of you would dig in.
About this week
Last Saturday (15th August), India celebrated 73 years of independence and we (Pratyush and Aditya) thought this week would be a good time to reflect on how the governments across the world are (slowly) evolving themselves into platforms to render citizen services effectively and efficiently. The trend is far from new, in fact, it’s as old as me. Estonia was the first country to attempt this in the late 90s but it’s probably more popular for being the country that gave birth to Skype. Singapore was a fast follower giving the world a lot of learnings and frameworks.
While this trend exclusive to any country or geography, we’ll pick and unpack the Indian government’s platform story. It stands out because it coincides with the 4th Industrial Revolution. As India rises as a global and economic superpower, it could well be the bridge that connects India’s ancient glory days and (hopefully) the global influence in this century, bringing together a unique mix of grand vision, speed of execution, and (very) wide adoption.
Certain important concepts
This is a quick executive summary/recap of some of the concepts, terms, and references from our archives that we’ll be using in this particular piece.
Platforms, in general, connect different individuals and organizations for a common purpose or to share a common resource.
Platforms are designed to be monopolies.
Platforms are of two types - innovation platforms and transactional platforms. The best way to visualize this difference is that an innovation platform has a 1:many dynamic where a single piece of inventory on the digital platform could be used by a lot of people simultaneously - think App Stores or Operating Systems. Transaction platforms have a 1:1 or 1: a few dynamic where a single piece of inventory can only be used by a certain set of people - think Uber, Swiggy, and Amazon.
Digital Transformation and the Industrial Revolution 4.0 are mere manifestations of the internet becoming ambient and computing becoming mobile/distributed. The lines between online and offline are blurring every day and hence the concept of physical and digital is obsolete. The interesting distinction that remains is the concept of connectivity and it’s the design principle that’s fed into the creation cycle of every platform. It’s also the reason why every major tech co is splurging billions of dollars to get people to come online and get connected.
Platforms are very different from products. Their primary job is to facilitate interactions between two or more parties. The value of a platform increases with the number of interactions of top of it. This is governed by data and data is the orchestration engine platforms run on. Hence, every major platform got where they are by devising effective mechanisms that help them collect more data and use it to increase the value of their platforms. Some even sell their products at an initial loss and use services on top of it to accrue profits. Here’s a simple case study that delves into the topic.
Now that the basics are out of the way, let’s dive right in.
But first, if you’re coming across this post from an external source, please take a moment and consider signing up to get such insights delivered right to your inbox.
Death and Taxes but also Data
“Citizens tend to think of government as a kind of vending machine. They put in taxes and get out services that governments provide. However, this vending machine idea is giving way to the idea of ‘government as a platform.’ The platform metaphor means that government provides a system in place to deliver services not by governments alone, but also by citizens and others (which also allows people inside and outside to innovate).” – UN E-Government Survey, 2014
From Flipkart to Zomato, GE to GAP, we’ve talked about how company after company in industry after industry is undergoing digital transformation. We’ve also talked about the frameworks one can use to analyze the respective transformations. But how about governments?
At first, you might want to ridicule me but this is definitely an intriguing question and trust me when I say that this is something I’ve given a lot of thought to. I’ve been fortunate enough to have seen some of these large scale transformations from close quarters and in some cases, been involved in similar projects. My alma mater has also allowed me to learn from some of the people who’ve built the entire infrastructure. But I digress.
Let us try to understand how we got here in the first place.
It was 1784 and the world was introduced to the process of mechanization. This was marked as the first industrial revolution and it continued until 1870 when the world discovered the concept of mass production that marked the second industrial revolution. The world witnessed the third industrial revolution in 1969 through the form of automation. And given that India became independent in 1947, we were not able to participate (properly) in any of these revolutions.
But it’s 2020 and the world is at the cusp of the Fourth Industrial Revolution - an age that will be characterized by cyber-physical systems. This is a time when India is trying to infuse digitization into various governance processes. Interestingly, it also coincides with us leapfrogging into the 4th Industrial Revolution parallelly.
In such a parallel universe, we have a citizen of the country who is not connected to the internet in a remote corner of the North East. There could be similar citizen profiles in Odisha, Rajasthan, and Kerela. But what ties them together today is Aadhaar. Over 1.25 billion people in India have Aadhaar making it the biggest stack in the world today that has billion-plus users but not owned by a private company. If you’re looking for some names of the platforms - Facebook, Apple, Google, Microsoft, and Amazon are (now famously called the FAGMA) from the west while we have Baidu, Bytedance, Tencent, and Alibaba (acronym BBAT).
Now, what makes Aadhaar special is its truly open-source nature but also an entire stack that’s been built around it. It was initially built to render Government-as-a-Service but now is being used to do a lot more than that.
The stats in the aforementioned image help us truly understand the impact of this publicly owned platform. There are certain important characteristics of Aadhaar that we will be discussing in the next section. But one that truly stands out is the frugality to maintain the platform and this has helped drive wide adoption. And the fundamentals then follow - the moment you give away a product for cheap and enable digitization, data becomes the new currency of the ecosystem.
Interestingly this has flipped the narrative of only taxes being a subscription fee for being a citizen of a country to now include data as well. If you're an Indian citizen, you now pay income tax along with your data to the government to help it serve other citizens better. We'll explore what we mean by this in detail in the next section.
India ka Aadhaar
The above figure breaks down India’s income distribution as of 2020
19. Keeping this illustration in mind will help us better understand some of the key challenges that Aadhaar had to address. This will also tell us some of the key characteristics of the platform.
Given the scale, Aadhaar is among the most frugal platforms in the world. The cost of building the platform, onboarding users, and maintaining it has been around ~$1.6 billion. Some quick research and some back of the envelope estimates will show you that Google has spent about $120 billion to date to acquire and maintain all its users. Visualize the difference.
It is truly an open innovation platform and isn’t owned by any private company.
It connects both the digital natives and the digital non-natives. And given the design constraints, it needed to. Anybody in India can access Aadhaar and a lot of the citizen services even without using the internet. Moreover, it also acts as a great leveler as a $13 candybar phone is equally powerful for accessing it as a $1300 iPhone.
The platform is designed for mobile-first consumption.
Now let’s tie this up with our learnings from the previous pieces and draw a high-level understanding of the Indian Government as a platform.
The key objective of platforms was to enable the stakeholders to have efficient transactions on top of it. The efficiency of the transactions drives repeatability and the more frequent the transactions happen on the platform, the more valuable it becomes.
This is exactly what’s happening with Aadhaar. The deep penetration of the stack allows the government to launch multiple interesting schemes on top of it - from a technology and a scale perspective. And the more people get connected, the more efficient it becomes for the government to deliver more and better services in the future.
Not MEAN or LAMP, but India Stack
If the government were to deliver a scheme like Ayushman Bharat, which was in the budget of 2018, that is catered to the Deprived section of the audience, all existing technical stacks like the MEAN and the LAMP wouldn’t work as this amounts to roughly 500 million people.
To be able to deliver something so complex, you’d need technology and business processes at scale. And the goal is not just to be able to serve the audience but to keep continuing to serve that audience. Thus, if the costs of delivering the solution are in the typical range of $40-50/user annually, it’s destined to fail. To address these issues, India has its own technical stack, the India Stack, that allows the government to deliver efficient citizen services at scale.
Source - https://www.indiastack.org/about/
Aadhaar is just one component of the India stack and is present at the Identity Layer or the presenceless layer - where a universal biometric digital identity allows citizens to participate in any service from anywhere in the country. This is the foundation on which other layers are built and they keep on interacting with the other layers to help the government provide citizen services at scale.
Reaching out to several people at scale frugally has always been a challenge in India and often is the reason behind failed policy implementations despite the right intentions. But things are changing and changing fast as no other public platform in the world is more efficient and scalable than India’s latest technological sensation.
Reimagining Govt as a Service
The massively efficient technical infrastructure allows the government to brainstorm a new scheme, bring out a service, align the processes, and deploy it to the citizens in a matter of 6-8 months. Not to forget, everything can also be done in most indigenous languages and for all digital literacy levels.
India’s UPI now boasts of billion-plus transactions every month with June clocking around 1.34 billion transactions. UPI is also front-ended by mega consumer giants like Google and Facebook. UPI also works offline, is extremely cheap, and works with the lowest of tech. More bank accounts were opened using the same platform than the entire population of the USA. India is truly a mobile-first economy with a net addition of 110 million smartphones per year.
35.6 million Indian pensioners have signed up for a digital means of pension. If you remember the iconic scene from the movie Munna Bhai MBBS, you’d probably agree with me when I say that it is one of the best service govt can provide to the senior citizens.
The stack also allows different SLGs to launch their schemes with Direct Benefits Transfer (DBT). To date, over 439 govt schemes with DBTs have been launched on top of the stack. DBTs have also helped transfer Rs 36,659 crore since the beginning of the lockdown with more and more SLGs competing to put more schemes on the stack.
Stack for businesses & startups
The same stack that helps the govt save Rs 1.4 lakh crore also helps startups and businesses. Jio acquired 108 million customers in 170 days leveraging the stack at an average cost of user acquisition at ~$2 USD that was 40% lower than their competitors. The stack also enables startups to innovate frugally. UPI was a great leveler for startups like PhonePe and Paytm to compete against the likes of Google and Facebook in payments. It also allows the likes of Zerodha to acquire users faster compared to competitors.
Small and medium businesses can get approvals for loans in 59 minutes. And the number of transactions happening on Rupay cards is 10% more than Visa and Mastercard combined. With unusual situations created due to the pandemic, healthcare and education are set to be the two new sectors to witness a lot of growth.
That said, there are certain design principles when you’re building for India leveraging the India stack. A quick summary -
Building for mobile-first consumers
Support for regional languages
Voice-enabled solutions
Usability in assisted mode
Capabilities should be accessible using the lowest-tech
Offline inclusion to reach the masses
Concluding Notes: Open Data, Governance, and Inclusivity
An important characteristic for the major platforms today is their ability to generate value outside of their firm and a lot of that happens through crowd-sourcing. Google Maps works on the concept of crowd-sourcing, based on the data we provide them. The same is true for other platforms as well - the more people use it, the better and more valuable the platform becomes for them. Similarly, the public platform attracts more than 5 million active users contributing to citizen-led development. The Swachh Bharat Abhiyan is a classic example of this. The Swachh Bharat logo was a crowdsourced idea in itself and an outcome of participatory governance.
This is truly governance as a service that involves people and takes in their feedback to make its processes and policies better. The platform is not just a digital platform only. It works equally well without an internet connection. In such a case, feedback is taken through Man ki Baat. This website helps you learn about how it works in real-time. An interesting initiative also allows a certified officer to go and survey people in the village and then inform them about the services they’re entitled to but not avail. And the best part is that they can apply for those schemes digitally. This is the fundamental premise of enabling efficient interactions on a platform to exponentially increase its value. The more data you provide it, the more you use it, the better it functions and not just for the government, but for all the stakeholders involved.
The first wave of e-commerce saw a lot of these transactions happen in silos, in isolation. They had little knowledge of each other. And hence, it took a lot of time for e-commerce to become as convenient as they are today.
However, the beauty of the platform in the discussion is here that it is not about fixing a broken system. The unfair advantage is that this comes at a time when we’re leapfrogging into a new age and thus, don’t need to fix a broken system.
I’d hope for the platform to shapeshift and become even more efficient for the users in the following manner - it should start with the citizen and enable each citizen to pick the services that were relevant to them. Almost every citizen already has a digital ID to use and tap into all those services that their tax rupees are paying for. The digital ID now becomes a subscriber ID that are absolutely fundamental. They help you to be data-driven and also allow you to spin up new services. This concept of open and inclusivity is what the platform should be striving for next.
Here’s what’s happening in the same space around the world, from the UN E-governance survey -
In Dubai, the water department is using AI-enabled chatbots to respond directly to citizen queries.
Singapore has a one-stop-shop government portal that provides access to hundreds of e-services, including letting people monitor their social security savings.
Sydney residents can access hundreds of data sets organized into sections that provide city-level information on the environment, community, economy, transport, and sustainability.
Amman residents have online access to all local and international procurement opportunities and bid applications for municipal projects.
Bogotá has an online system designed to manage petitions — a virtual tool people can use to submit complaints, requests for information, or concerns about possible acts of corruption.
Madrid has paired their ambitious e-government portal with an equally ambitious effort to make sure that citizens without online access can get equal access to services.
Berkeley has open-source maps of all their trees, allowing anyone to learn about tree identification while out on a walk.
It’s still early days, but here’s a cheat sheet for how governments can make the shift from the world of functionality and into the world of digital possibility:
Start with the citizen, not the transaction. Think of citizens as subscribers to government services. They pay you taxes and also their data.
Establish a secure digital citizen ID for every citizen.
Build a citizen profile on top of these IDs.
Think about the entire subscriber experience, not just a single transaction.
With the India stack, India is leading in a lot of these areas and that should be a truly encouraging sign for all the citizens.
Further Readings
It’s been a very, very long take on the topic but something I really enjoyed bringing to you. Hope you learned something while reading it. A disclaimer - I’m not aligned to any wings and this is purely a take on some of the initiatives from a business-technology perspective, sticking to the theme of this newsletter. Here are some links should you want to deep dive -
Interesting Learning Material
Engineers from BITS Pilani are building Nanosatellites
Apple becomes a $2 trillion-dollar company by market cap
And I’m just pissed with what LinkedIn is doing with its notifications tab
We’ve covered 8 topics so far. Why don’t you take a look at them here? We’re sure you’d like them.
We’re constantly listening to you for suggestions and feedback to improve. We’ve also added a section for you to recommend a good podcast/article/post/Tweet(s)/video to the community. If you want us to acknowledge you, drop in your name/link to your LinkedIn/Twitter profile in the space as well.
So, it’d be great if you let us know how you like our newsletter so far.
In case we haven’t met, I’m Pratyush Choudhury. I hope it was worth the while and left you better than it found you! :)
——
And if you enjoyed reading this, please share further.