Data Governance - The DPI Way

As India prepares for its G20 presidency, the focus on its Digital Public Infrastructure gains momentum. India’s DPI, built on open, interoperable principles, offers a new approach to data governance that benefits both developing and developed economies. It aims for equitable data use, empowering individuals and enabling market innovation.

This article was first published in The Mint. You can read the original at this link.

Is it just me, or is everybody suddenly talking about digital public infrastructure (DPI)? Over the past 6 months, I have been on more panels and asked to write more articles on this subject than I would have thought necessary—and yet, as the year draws to a close, the buzz, if anything, is only getting louder. DPI is the flavour of the month and it isn’t hard to surmise why.

The G20 Story

In less than a month, India will assume presidency of the G20, and as we think through the broad themes on which we can base our leadership, there are few narratives more compelling than India’s DPI journey. There is much to learn from how we built a population-scale digital identity system, fast payments and data transfer solutions and how we’ve been able to use these innovations to empower our people with their own data. Our forthcoming G20 presidency will be an ideal opportunity to shine a light on these achievements.

But if we present the Indian DPI successes in solely developmental terms, we will be selling ourselves short. Our digital infrastructure is much more than just a tool to help emerging economies leapfrog the traditional stages of development. The governance principles that are at the core of India’s DPIs offer solutions to some of the problems that even developed economies are grappling with. They are not just a means to accelerate development, but a novel approach to data governance as a whole.

Internet - the Original DPI

To understand what I mean, we need to go back to the very beginning. The internet was the world’s first digital public infrastructure. It was built on open protocols and designed to be interoperable. Because of this, private enterprises could innovate on top of it, which in turn resulted in its rapid proliferation around the world.

But as the customer base of private enterprises grew, they began to realise the value inherent in the stores of data they had accumulated from their users. They built massive, multi-faceted platforms to further concentrate the value of data in their hands from the powerful network effects they had generated. As a result of this asymmetric access, private enterprises benefited disproportionately from data when compared to the individuals to whom that data pertained.

We attempted to fix this inequity by enacting data regulations that limited how data is collected and used. We prohibited the processing of data without consent and outlawed its use for purposes not previously specified. We limited how much data could be collected and for how long it could be retained.

This approach has been less than successful. Despite these measures, private enterprises still do pretty much what they want with our data. All we have done is increased the cost of compliance, which makes little difference to large companies that can afford to pay this cost. What we didn’t realise was that the regulations we thought would limit how companies use our data ended up making it even harder for us to benefit from our data that these private companies hold. In trying to prevent data controllers from gaining disproportionate value from our data, we’ve made it hard for us to benefit from our data.

Technology for Governance

We need a new approach—one that will allow for a more equitable use of data. Rather than restricting how private enterprises use data, we need to make data more accessible to those who need to be able to use it.

This is the problem that India’s digital public infrastructure seeks to fix. Inspired by this design philosophy of the early internet, India has built its digital infrastructure to be open and interoperable. While the core is controlled by the public sector, the infrastructure has been designed so that private enterprises can build on it, developing solutions and user experiences that will allow individuals to access their data and determine how it is used. In essence, this is a techno-legal solution to data governance—one that allows regulators to regulate and innovators to innovate.

Since all the protocols are under the control of the regulator, market participation rules can be directly encoded into the infrastructure. Which means that regulators can programmatically lower transaction costs and establish a level playing field for market participants. Since the private sector has been left to develop the market strategy and end-user experience, we can be assured of product innovation and competitive consumer-centric outcomes. This approach has resulted in the deep penetration of our foundational DPI throughout the length and breadth of the country.

Universal Benefit

All economies stand to benefit from such an approach, no matter what their stage of development. For developing economies, it enables inclusion, allowing those otherwise excluded from the formal financial system a way in. It lets individuals use their digital footprints to access credit to which they might otherwise not have been eligible. For developed economies whose digital infrastructure has been built by private enterprises, it offers individuals a way to access their data that is contained in these silos. It does so by facilitating micro-portability through just-in-time digital consent that allows data to flow between multiple participants in the ecosystem.

It would be a mistake to think of India’s DPI story as a simple technology play. In a world where we are increasingly reliant on data for all we do, this is a new approach to data governance.

The set of data principles that it describes can go on to forever re-define the relationship between data and society.