India, he added, has also taken an “extraordinary” leap digitally in the global economy and made about five years of progress over the last two years of the Covid-19 pandemic.
Smith, who was on a visit to the country last week, applauded the government for “pausing on the privacy Bill” and said this was a smart way forward since it gave the government time to connect the dots on this important legislation. “That notion, that a government would pause to think about how a privacy law should move with a better connection to other fields — that’s an act of wisdom,” Smith said.
The government withdrew the Personal Data Protection Bill — which had been in the works for nearly five years — last month. It said the Bill would be replaced by a comprehensive legal framework that will be designed to address contemporary and future challenges of the digital ecosystem.
India, Smith pointed out, has for long been one of the major sources of talent in software and a great creator of software Intellectual Property but is now joining the ranks of the top 2-3 software economies in the world.
“India has become a software superpower,” he said, adding that a significant part of it is the India Data stack, which is an “unparalleled accomplishment” in the world. What makes it unique is that India has managed to create an identity layer for its people despite the sheer size of the population, along with a layer for payments.
Discover the stories of your interest
‘Influence of India will only grow’
“I think India is now well positioned to become one of the great data capitals of the world and really double down on the status,” Smith said.
The European Union, United Kingdom, the United States, China, and India are “the most influential” when it comes to the future of technology regulation, followed closely by Australia. “So, India is playing a very influential role in the world. And I think the influence of India will only grow, in part because digital technology is so important.”
The UK, according to Smith, has also proposed a system post-Brexit to get three principal regulatory agencies to coordinate and that is also a “smart move”.
“Those are the only two places right now—Delhi and London—where governments have said, “no”, we have to connect the dots between the different things that we’re doing. I think this government gets huge credit on this,” he said.
A well-regarded attorney in the United States, 63-year-old Smith is also president of the $198 billion Redmond-headquartered technology behemoth, which started off building operating software for personal computers in the 70s and has now transformed itself under the leadership of India-born CEO Satya Nadella through its focus on cloud, mobile and new age technologies like quantum computing.
In fact, Smith was elevated as vice chairman last year, the same year when Nadella was appointed chairman.
During his visit, Smith met with several senior government officials, including Minister of Electronics and IT Rajeev Chandrasekhar, and the G20 Sherpa and former CEO of NITI Aayog, Amitabh Kant, in New Delhi.
Smith also did an all-hands meeting with Microsoft India employees from across India, met members from industry association Nasscom along with taking a trip to Bengaluru where he interacted with young learners from the CyberShikshaa programme, among other engagements.
“We are looking increasingly to enable India to be one of the great exporters of software IP… to take what has worked here, and make it work for many other parts of the world as well,” he said.
India has built projects such as Aadhaar and UPI and made them work, and many countries want to emulate it. India has also built a global leadership position for itself, and this leadership will also translate into a more expansive economic opportunity for talent in the country.
“The people who have created it, the people who know it, are based here in India,” he said.
On the global talent crunch, which is especially pronounced in the technology industry, Smith said that in Europe, Japan, South Korea, and increasingly in North America, the working age population is shrinking each year and so they face the fundamental question of how to grow the economy.
“The truth is, there are probably only two ways—more technology and more immigration. And we’ll see what different countries decide. Every country is going to want more technology. Now that challenge, frankly, is India’s opportunity. Because while the growth rate is slowing, in India, the working-age population is still growing,” he said.
India’s population can help fuel economic growth elsewhere in the world, especially if it is connected to technology that the rest of the world needs, he said.
On challenges that the software industry faces due to a likely recession in the US economy, Smith said that there is a continuing need for more technology in areas such as supporting governments, businesses, non-profits, etc.
“In terms of providing the digital infrastructure for societies and organizations, we’re very optimistic, especially the long term. We may see short term business cycles.”
Geopolitical tensions between Russia and Ukraine have forced many global multinational companies to rethink their business models, which were earlier seamless and borderless.
“Certainly, for a global tech company like Microsoft, or any global tech company, the geopolitics of the world are more complicated than they were two or especially five years ago… the Chinese market is not an open market for American technology. Russia is no longer a country where tech companies are able to operate simply by virtue of the sanctions laws that have been applied,” he said.
Microsoft aspires to support healthy and beneficial use of technology everywhere in the world. “We just are not comfortable licensing in some countries where we worry about how technology can be used or abused,” he said.
Speaking about Metaverse, on which companies such as Meta (formerly Facebook) have put a great emphasis on, Smith said, “Metaverse will be important, but I think that is perhaps a name that does a disservice to the world, because it suggests that there’s a singular flame that is somehow different from the place we already live.”
He explained that Metaverse will be many things, not one.
“It’s really a label that can be applied to ongoing advances that we’ve seen in augmented and virtual reality for a number of years. It will be important, but we see it as important for retail, important in manufacturing, a variety of different business uses and for entertainment.”