Rebooting India: Realizing a Billion Aspirations (26 page)

Much like GPS, a more recent instance of a military technology being opened to the public is that of autonomous vehicles. Through DARPA—coincidentally the agency that also birthed the internet—the US government has been funding such endeavours for over a decade.
¹⁵
The underlying technology has now entered the commercial space; Google is testing self-driving cars using its Google Chauffeur platform, Uber has just announced an academic collaboration with Carnegie Mellon University to ‘develop driverless car and mapping technology’, and Apple is reportedly investigating technologies for building electric and self-driving cars.
¹⁶
While we may not see a fleet of self-driving cars taking over our streets in the near future, it’s worthwhile to consider that various US state governments are already starting to pass laws that permit driverless cars to operate on state roads.
¹⁷
Once again, government regulations need to anticipate innovation by keeping a close eye on emerging trends and assessing their potential impact and chances of widespread adoption.

In another example, while space exploration has traditionally been a government purview, in recent years that has changed to include increasing participation from private sector companies and hobbyists. Thanks to the smartphone explosion, the prices of key electronic components and sensors—GPS, cameras, accelerometers and the like—have plummeted, making these easily accessible to the general public. The author and former editor-in-chief of
Wired
magazine Chris Anderson has referred to this phenomenon as the
‘peace dividend of the smartphone wars’.
¹⁸
The accompanying diagram explains the payoffs from this dividend.

Today, a hobbyist could build a drone, mount a camera on it and take pictures of sensitive government facilities. A terrorist may use it for more dangerous purposes. More benignly, companies like Amazon want to deliver packages to their customers using small commercial drones.
¹⁹

In the US, private companies like SpaceX are now pushing the barriers for spacecraft development and innovation, stepping firmly onto what used to be NASA’s playing field.
²⁰
As nanosatellites become cheaper, it’s likely that more private operators will enter this space in India as well. A for-profit organization in India is now participating in the Google Lunar XPRIZE challenge to build and design a robot capable of landing on the moon, a domain that formerly only our government space agency, the Indian Space Research Organization (ISRO) operated in.
²¹
The entry of private companies into fields that have traditionally been the monopoly of government will no doubt create a new set of regulatory clashes to be ironed out.

Maintaining a balance between innovation and regulation was something that we dealt with on a daily basis during our days at the UIDAI. The energy futurist Amory Lovins, chairman of the Rocky Mountain Institute and a personal friend of Nandan’s, gave a talk in Bengaluru in which he discussed the four types of innovation that are essential to bring about any large-scale change in society: policy, technology, design and strategy innovation.
²²
The Aadhaar project checked all these boxes. Policy innovation was required to allow Aadhaar and its allied services, such as e-KYC, to work. The development of biometric technology at Indian scales and price points, including the ability to carry out de-duplication for a billion people, the design and rollout of the enrolment programme and other Aadhaar-based applications—all these aspects of Aadhaar met Lovins’s definition of innovation.

It wasn’t until much later that we realized that Aadhaar also fit neatly into another model of innovation, one that originated as a technology concept but is now gaining widespread acceptance. In late 2014, Nandan gave a talk at the Massachusetts Institute of Technology on the architecture of Aadhaar. One member of the audience happened to be Dr Chintan Vaishnav, whose research focuses on the intersection of technology and government policy. Upon hearing Nandan’s talk, he pointed out that Aadhaar’s design was strikingly similar to what has been christened the ‘hourglass model’, first mentioned in a 1994 report by the National Research Council in the US. As Chintan explains, ‘The “hourglass architecture”—where minimal standardization at the waist of a layered architecture (e.g. the IP layer of the internet) enables burgeoning innovation above (e.g. apps) and below (e.g. wireless, wired networks, etc.) it—has been key to the innovativeness of the internet as a platform.’
²³
In other words, a simple, easy-to-use solution forms the waist of the hourglass, while allowing for innovation in multiple spheres both above and below. One such example is the GPS technology that helped to change Vettath Shankaran’s fortunes. While the GPS technology itself can be considered the narrow waist, below it lie any number of devices and sensors that can detect this signal, and above are a suite of applications—taxi services, fitness apps, and so on—that use GPS services to determine location for a multitude of uses.

How does this model apply to Aadhaar? Here, the waist consists of the Aadhaar number—a unique identifier for every individual—and authentication services linked to this number. Below the waist lies innovation in design, in this case biometric devices that can capture fingerprints and iris data. It also includes innovations in the way people are enrolled for Aadhaar. Above the waist lies any application that might require an identity verification service. That number has already hit half a dozen and is steadily inching upwards; applications that require ID verification currently include the central government’s biometric attendance system, Aadhaar-based payments, direct benefit transfer for subsidies, social security payments, PDS reforms, KYC for bank accounts and SIM cards, and more.

It turns out that the hourglass model is a good approach to building governance systems. It forces us to think about the minimal intervention that government needs to make in order to provide public goods and services. What may appear to be a simple solution is the outcome of assembling several experts, understanding the domain and precisely defining the ‘thin solution’ that will make the delivery of government services more efficient while also encouraging the development of innovative solutions to long-standing problems.

As the accompanying diagram explains, focusing on the waist of the hourglass—the thin solution—gives government a significant competitive edge. Rather than having to build entire systems from the ground up, government can choose to concentrate on creating a single, specialized system that delivers one specific outcome, an approach that also lends itself well to being scaled up. This single solution can be widely compatible with both public and private services, allowing an entire ecosystem to spring up with little additional effort on the government’s part, and creating a structure that rewards innovation. From the political standpoint as well, a thin solution makes sense—by choosing to offer only a single, tightly defined service, government departments can avoid stepping on too many toes within the administration as well as reduce the amount of opposition from external sources. Thin solutions don’t require drastic changes to the status quo, further reducing the potential to ignite the kind of turf wars that have already sunk plenty of well-intentioned government initiatives. They are also easier to write into law since they are restricted in scope, and since they are easy to implement and scale up, they can gather enough momentum that they become irreversible.

If we are to build a new class of institutions capable of nimble, creative thought and action to promote innovation in government, we need regulatory innovation to occur in lockstep. The concept of a regulator is derived from the field of electrical engineering; a voltage regulator tries to maintain electrical voltage at a constant level, protecting the
equipment connected to it from sudden fluctuations. In the same fashion, regulatory bodies are meant to buffer the population they serve from the vagaries of the open market. In modern times, regulators are also expected to devise policies that encourage innovation. Reconciling these two opposing goals requires a delicate balancing act. For example, unchecked innovation in financial products led to the financial crisis of 2007. While regulation may sometimes lag innovation, it should not curb it.

After the economic liberalization of the 1990s, we have built a number of regulatory institutions. Regulators that oversee the financial sector include the RBI, the SEBI and the IRDA. Legislation was also passed that enabled the creation of electronic depositories to hold securities. The NSDL paved the way for dematerialization of share certificates, an essential component of electronic trading; today, NSDL is one of many flourishing stock depositories.

These institutions are likely to be restructured and strengthened under the recently established Financial Sector Legal Reforms Commission. We also have regulators for pharmaceuticals, electricity, food, and for monitoring the anti-competitive behaviour of firms in the market. In order to function optimally, these regulatory bodies need individuals with expertise in relevant areas, but haven’t been able to attract the kind of talent they need. Government officers who have spent decades in administration are simply not on the cutting edge of technology and are often unaware of the rapidly shifting landscape around them.

We desperately need to rethink the human resources policies for our regulatory bodies so that they can deliver on the twin goals of safety and growth. It takes a mature government to create an ecosystem conducive to growth and change, and to support it with the appropriate regulation. Aadhaar and its linked suite of applications would never have come to fruition if various regulators had not understood the potential of empowering every resident of the country by granting them a unique ID. With a bold vision and some regulatory muscle to back it up, we remain confident that Aadhaar will be the first of many schemes that completely reshape
the relationship between the Government of India and the people it is meant to serve.

A senior ex-bureaucrat explains to us the unintended consequences of the checks and balances imposed by the government upon civil servants:

I was in a senior post at the State Farms Corporation of India some years ago. We were told about some unexpected rainfall which was likely to happen soon, and we decided to buy gunny bags to protect the stored seeds from getting spoilt. We didn’t have time to follow the standard procedure of publishing a tender in the newspapers and identifying the lowest bidder. The marketing officer suggested that we just buy them from the same supplier we usually used. Much after the rain had come and gone, a question was asked as to why we had not published a tender; was there some sort of underhand agreement between the marketing officer and the supplier? Of course, we were able to justify our actions, and the matter was closed, but had a serious inquiry been launched, the matter would have left a black mark on the officer’s career for no fault of his.