Brad Smith, president of Microsoft Corp. Smith told ET’s
Surabhi Agarwal in an interview that the government’s move to rethink its data privacy law was ‘an act of wisdom’. India, he added, was also fast becoming one of the most influential nations in terms of the future of technology regulation, on par with the European Union, United Kingdom, the United States and China. Geopolitical tensions, he said, have sparked a new world order and the talent crisis gripping major countries with ageing populations are opportunities for India. Edited Excerpts:
What is Microsoft’s outlook towards India? What are the opportunities for growth that you see in the country?
India has made an extraordinary leapfrog move digitally in the global economy. It has probably made about five years of digital progress in the last 24 months. India has long been one of the world’s major sources of talent for the software field, a great creator of software IP. But I think it’s now joining the ranks of the top two or three software economies in the world and has become a software superpower. One significant part of this is the Indian data stack. That’s an extraordinary accomplishment. I think it’s unparalleled in the world. I think India is now well positioned to become one of the great data capitals of the world and double down on the status.
What does that mean for Microsoft?
First, it means the right investments, I’m very pleased that we’ve doubled our data centre capacity in the last two years in India. I think our aspiration could be to become one of the great supporters of India’s digital growth, both to serve the people and to enable India to be one of the great exporters of software IP. And, in many respects, to take what has worked here and make it work for many other parts of the world as well. In the Indian digital economy, it gives us a better opportunity to partner with startups. As a company, we have provided digital infrastructure for many countries. When you look at where India is and at the digital in the data stack, it hasn’t yet migrated to the cloud. It will need to migrate to the cloud. I think we have a better cloud than anyone else, both because of the technology and the features.
You mentioned exporting infrastructure. ONDC – the Open Network for Digital Commerce – is an area that Microsoft has recently partnered with. Is that an area where you would experiment with India first and then take it globally?
I think that (ONDC) is one of the great opportunities for India. The export of Indian IP is what happens every day. But the opportunity India has now is to take an entire software stack or multiple layers of it and begin to move that to other countries as well.
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Are you talking about Aadhaar, UPI?
Yes, exactly. I think it’s early days for that proposition. But what is striking is that what India has made work is what a number of other countries want to work. The way India has made it work is exactly the system with how other companies want to put software to work. So, that is a new leadership opportunity that clearly will add global leadership in a digital world. But it’s also leadership that I think will translate into a more expansive economic opportunity for talent in India because software can move, but the people are still going to be needed to support it. The people who have created it, the people who know it, the best are here in India.
India is currently in the middle of drawing up several important regulations for the internet and technology companies. What is your view?
There are certain countries that are the most influential when it comes to the future of technology regulation. The European Union, United Kingdom, the United States, China, and India. Followed closely by a country like Australia, which continues to be a fast mover, and a very well-informed government. And there are some others like South Korea, Japan. So, India is playing a very influential role in the world.
I think the influence of India will only grow, in part because digital technology is so important. And you’re talking about what soon will be the world’s largest country in terms of the number of people. But the second thing is that the Indian government is moving forward in a very smart way. And, to give one example, is the fact that the government paused the privacy bill. People may look at that and say, ‘oh, is that a problem, you are (not) moving faster?’
The thing that I worry about the most around the world is when governments are trying to work so quickly, to move the laws forward together in so many fields, at the same time, that they don’t have the opportunity to think through how to put the pieces together. 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.
How do you look at the talent situation at a time when the workforce in many countries is ageing and a country like India is facing a skills shortage despite abundant talent?
In Europe, Japan, (South) Korea, and increasingly in North America, the working age population is people between the ages of 20 and 64. That number is shrinking every year. So, they face this fundamental question, ‘how do you grow an economy?’ 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. It’s a reflection of the fact that India is a country where half the population is 25 years old or younger. India has a population that will continue to grow between now and 2050. So, India’s population increasingly can help fuel economic growth elsewhere in the world, especially if it’s connected to technology that the rest of the world needs.
After two years of hypergrowth, there are clouds of a slowdown due to a probable US recession. Your views?
The short answer is, especially in so much of the work we do, supporting governments, businesses, non-profits, there just is this continuing need for more technology, and especially the kinds of technologies that we create. In terms of providing the digital infrastructure for societies and organizations, we’re very optimistic, especially about the long term. We may see short-term business cycles, but the long-term remains quite extraordinary.
How does Microsoft look at geopolitical tensions like Russia-Ukraine and the situation with Sri Lanka, China-Taiwan?
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. We aspire to support, I’ll say, the healthy and beneficial use of technology everywhere in the world. But, by and large, 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 sanction laws that have been applied. We will always be a company that is committed to, as we like to say, empowering others to do great things with technology. But we don’t have the same ability to support every part of the world that we had a decade ago. I also think that we’re a principles company, there are certain sensitive uses that we just are not comfortable licensing in some countries where we worry about how technology can be used or abused.
What are your thoughts on emerging trends like Metaverse, Web 3?
First, I would like to talk about artificial intelligence. I think that the next five years are likely to bring major leaps forward in the state of AI. I think that’s going to create major opportunities to harness the power of AI. So, AI is critical. I think Web 3 will play a fundamentally important role in better (protecting) people’s privacy, (create) opportunities to better promote interoperability.
I’m a big believer in the future of quantum computing. I think we’re going to see it quite possibly accelerate between now and 2030, more than people anticipate. It could have a fundamentally important impact on our ability to solve some of the world’s great problems, whether it’s health and medical research, or around climate and agriculture. It can be a fundamental leap forward.
The 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. The Metaverse in our view 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. But it’s also a good example of how each of these new technologies will be important economically, and beneficial in solving important problems. It also raises profound questions and responsibilities for everyone who works on or is connected with technology.
