Welcome to the first issue of what I hope will be a weekly newsletter on how the tech and digital economy manifest themselves around the world. My singular goal here is to learn how and why nations, cities, and regions differ in their adoption, development, and innovation of modern technology. I invite you to join me on this journey. If you like this newsletter, please share it with a friend.
1. India’s Exporting its Payment Infrastructure
India has this really cool payment system called the Unified Payments Interface (UPI). It allows you to consolidate several bank accounts into a single application, pay merchants, and transfer money to friends; all of this happens in a secure manner. Plus, there are no fees. The system was launched in 2016 and has seen tremendous growth from zero to 300 million users, 500 million merchants (yes, million) and 9 billion transactions per month.
And now India is going international by exporting the UPI system. There are two components to this push.
Firstly, Narendra Modi is vigorously advocating for UPI's worldwide acceptance. Given that the Indian government owns the underlying technology, adopting UPI around the world could potentially enable India to exert influence over other nations in the future. Moreover, it presents an alternative to the SWIFT system, an aspect that might appeal to countries aware of the vulnerabilities of depending on a US-centric network.
Secondly, and not as cynical, it helps Indians living abroad to send remittances. In 2022 India received $111.2 billion in remittances, leading the second-placed Mexico by $50 billion. To offer some perspective, in 2022 India received $49.9 billion in foreign direct investments. But sending money abroad is expensive, with the average commission hovering around 6.5%, a substantial chunk considering the limited income of many migrant workers.
Initiatives like UPI illustrate a noticeable shift in the innovation landscape, steering away from a US-centered focus and embracing a more decentralized approach.
2. Developing Countries are Excited About AI
A recent Ipsos survey explored people’s attitude towards AI.
Here's a broad takeaway: people in developing countries, particularly in Asia and South America, seem to harbor a more optimistic view of AI. In places like Indonesia, Thailand, and Mexico, over 60% of respondents believe that AI will significantly alter their lives and offer more advantages than disadvantages.
Moreover, when asked how AI will affect their job respondents in those same regions think that AI would both change their current job and replace it. So to oversimplify: people think that AI will replace their job and are happy about the technology nonetheless.
Now, the big question is, why this optimism? Well, several factors may be at play here:
Job satisfaction. The hypothesis here is that if you hate your job, you won't mourn if that job disappears due to AI. Although the APAC region has been noted to have a slightly lower job satisfaction rate on average, the deviation from other regions doesn't seem to be that significant.
General positive outlook about the future. One possible explanation is that people in the developing world are generally more optimistic. According to a UNICEF-Gallup poll, many in India and Indonesia believe that their children will have a better life than they do, a sentiment not as commonly shared by the Germans and French. This trend is supported by another Ipsos poll, which suggests that people in developing nations are more hopeful about the world improving.
Belief that AI is key to solving poverty and inequality. People in developing countries often believe that AI can bring significant changes, viewing it as a vital tool for addressing societal issues, in contrast to the incremental changes expected in developed nations.
People in Asia and South America tend to be more agreeable (which might impact survey results). The book “The Culture Map” by Erin Meyer discusses the differences between confrontational and non-confrontational cultures. In confrontational cultures like Germany, France, and Spain, open debate is encouraged, while non-confrontational cultures, found in places such as India, Japan, and Indonesia, prefer to avoid verbal conflicts. This trait might influence the way people respond to surveys about the potential impact of AI on jobs, with non-confrontational cultures possibly agreeing more readily with the premise of the questions asked. “If I’m being asked that, it should be true”
I would like to point one off-topic thing that has to do with AI hype. Most people agree that AI will change their life in the next 3-5 years like it some new thing. What people forget or unaware of is that it already has. It’s not like Google serves search results by hand.
3. People are Learning on Mobile Devices
Every year, Coursera publishes the Global Skills Report, highlighting the popular skills across different countries. The report is laden with interesting tidbits on the skills front, but today I want to delve into the methods people employ for learning.
First, and it’s a general point: people have adapted to learning through mobile devices. Coursera, as you may know, offers coursers and full degrees from top universities like Stanford online. And I would’ve guessed that if you want to learn about supply chain management or enhance your design skills, you would do that on your PC.
As it turns out, at least in 35% of cases learners prefer to obtain new knowledge from a device that is the nearest and dearest to their hearts — a smartphone. Honestly, I can’t imagine how people do this, since most coursers, I would imagine, would require a large screen.
The second point is that for Nigeria mobile is the platform to learn online. The primary reason for this is quite evident: only 30.4% internet users in Nigeria own a computer, while in Australia it’s 67%. Furthermore, I wouldn't be surprised if, for many Nigerians, their mobile device surpasses their laptop in terms of processing power.
What further showcases Nigerians’ inclination towards mobile devices is how the local industry is evolving in response to this preference. Based on data from Crunchbase, about 10% of edtech startups in the region incorporate the word “mobile” in their description, a figure that overshadows the 3.5% observed in the US. Moreover, there are establishments that even facilitate coding lessons via smartphones.
So yeah, as it turns out Duolingo is not the only mobile app used by learners.
4. Europeans are Concerned with E-commerce Sustainability
Is online shopping really a burden on the environment? It seems a considerable number of European shoppers believe so. Over half of e-commerce shoppers in countries like Germany and Spain are convinced that indulging in online shopping can pose environmental challenges.
It's no secret that the EU is quite proactive in adopting policies aimed at fostering a greener future for the planet (though the effectiveness of these policies can be a topic of its own), and it's notable that European nations are among the frontrunners in eco-friendliness.
Obviously, consuming stuff in general isn’t good for the planet. But is this European perception of e-commerce as an environmental issue grounded in reality? Is online shopping genuinely worse for the environment compared to traditional retail?
Well, it seems the jury is still out on this one. The Simon Property Group (and you might already anticipate the direction of their findings) undertook a study examining the potential emissions generated by both mall-goers and online shoppers when purchasing an identical basket of four items. Their findings suggested that shopping at a mall results in 60% less emissions than online shopping, primarily due to higher returns and extra packaging involved. However, another study contradicted this, indicating that the emissions generated from the transportation involved in traditional retail might surpass the total emissions from e-commerce.
So, are European shoppers in the right? While their concerns for the environment are indeed commendable, it's yet unclear whether opting for brick-and-mortar stores offers a greener alternative.
5. Cloud Gaming is Yet to Captivate the Optimal Audience
Cloud gaming may be (is?) the next big thing in gaming. It allows you to play games that traditionally required high-performing hardware on any device. In this setup, the actual computing occurs in the cloud, not on your device, meaning the power of your device becomes irrelevant.
It’s a nascent industry, but Microsoft, Nvidia, Sony are all making major moves in the industry. This industry is still in its infancy, but heavyweights like Microsoft, Nvidia, and Sony are already making significant strides. According to a report by Newzoo, there were 31.7 million paying cloud gaming users, a number forecasted to escalate to 86.9 million by 2025.
What is at least a bit curious is the player distribution. Asia boasts 36% of cloud gamers, Latin America — 6%, and the Middle East & Africa — 4%. Altogether, they make up 46% of the market, which is 9 percentage points less than the number of video game players in Asia alone. This implies that the product, which should be seized upon by developing nations with less resources to spend on gaming hardware, isn't actually that in demand.
You might argue that most video game players are casual gamers. They play free games, and the distribution of gamers is akin to smartphone distribution, which it is. Moreover, you might also argue that video game revenue is distributed similarly to the cloud gaming market, and again, you would be right.
However, I would suggest that this distribution is largely influenced by product awareness. India has 881 million internet users, and the US has 311 million internet users. But according to data from Semrush, the monthly search volume for cloud gaming is 165 thousand in the US and only 60 thousand in India. If people aren’t searching for the thing, how can they know how much it costs?
The point is, while cloud gaming does incur costs and individuals in developing countries may have limited discretionary spending, it seems that these countries are at least somewhat being overlooked by cloud gaming providers.
