The orginal article was posted on RestofTheWorld here
By regions, for regions: As tech ecosystems mature around the world, they’re not always following the path laid down by Silicon Valley.
1 China pushes for a self-reliant tech industry
U.S. sanctions burned an industry reliant on overseas components. Beijing is vowing never to let that happen again.
The recent troubles of ZTE and Huawei have revealed a critical weakness in China’s tech infrastructure: reliance on overseas components. Both companies depend on them to build smartphones and other products — and both suffered when U.S. sanctions blocked access to vital hardware and software.
Beijing is hell-bent on making sure that will never happen again. Virtual self-sufficiency in the technology sector is expected to be a major goal of the next Five-Year Plan, the blueprint that will drive China’s economic development from 2021 to 2025. The government has already signaled its intention to boost the domestic semiconductor industry, putting homegrown chips at the heart of everything from smartphones to electric cars.
But it’s easier said than done. Boosting the semiconductor industry requires more than just production expertise; it requires people skilled in the complex art of chip design, which means investment in a new generation of talent. That kind of change can’t come overnight. And even then, there’s plenty that can go wrong, as the financial crisis at Chinese chipmaker Tsinghua Unigroup shows.
Still, a fully independent Chinese tech ecosystem is a matter of “when,” not “if.” The shift will have a huge impact on the rest of the world.
2 African tech start-ups cash in
2020 brought big-ticket mergers and acquisitions in African tech and its comparatively small start-up market. It’s a sign to bet big on tech for Africans, built by Africans.
In August, WorldRemit made the largest investment ever in an African technology start-up: The London-based company paid $500 million to acquire Sendwave, a remittance company that allows people in Europe and North America to send money to seven African countries and Bangladesh.
Nearly two months later, U.S. payment giant Stripe paid $200 million for Paystack, a Nigerian payment-processing company that has been dubbed the “Stripe of Africa.” More than any other, the Paystack deal was seen as the model: a truly African company, founded by two young people from Lagos, attracting attention from global giants.
Experts say it’s no coincidence that there have been a glut of deals focusing on African fintech. You can’t shop online without paying, so local payment platforms will only become more important as e-commerce grows across the continent. It’s made tech insiders optimistic that 2021 could be the year for more acquisitions in Africa.
3 Deep tech goes global
For decades, technology research has been led by the U.S., Western Europe, and Japan, but innovation is starting to happen elsewhere. It could impact not only how the next generation of technology is built, but how it will be governed.
“Deep tech” — the fundamental innovations that provide the foundation for future generations of technology — gravitates towards the U.S. and Western Europe, where public-funded institutions and large companies invest in academic research. While these countries are still at the forefront of deep tech, the gap between them and the rest of the world has narrowed.
China is leading the trend. Backed by huge government programs, Chinese companies like Megvii and Sensetime have become world leaders in specific applications of artificial intelligence, such as face and voice recognition. Tech giants including Alibaba, Huawei, and Tencent are investing in quantum computing. China — not the U.S. — is building a national quantum-communications network.
Beyond China, the globalization of academic research and venture capital is driving progress. Southeast Asia’s financial and tech hub, Singapore, has developed centers of excellence in food and health tech built on decades of investment in biotechnology and medical research. Indonesian start-ups are developing biodegradable materials to tackle the plastic-pollution crisis. Thai companies like mu Space Corp are developing satellites that enable internet access on airplanes and at sea.
Altogether, it has the potential to profoundly reshape the dynamics of our global economy, and to remedy historic inequities in how technology is designed and implemented.
4 Black Diaspora innovates across borders
Salvador, in the Brazilian state of Bahia, is posed to become a global tech hub for Black start-ups. It could become a model for international Black tech innovation.
The African diaspora is as vast as the diverse cultures it comprises, but there are some commonalities. Many — but not all — Black start-up founders struggle to secure funding compared to other groups. Until recently, centers of innovation were characterized by national identity, like Nairobi’s Silicon Savannah or Lagos’s Yabacon Valley.
But an emerging tech scene in Salvador, a city of nearly three million people in the Brazilian state of Bahia, is poised to change that. The size of Brazil’s Black population is second only to Nigeria’s. In Salvador, more than 80% of residents identify as Black — so it’s not surprising that the city is carving out a name for itself as a destination for Black-led tech innovation.
Following a $2 million investment round for Black start-ups from IT company Qintess, it’s only a matter of time before Afro-descendent communities in other Latin American countries and the Caribbean migrate to Bahia collaborate. And if Migo, a Nigerian-founded cloud-based money-lending app with an eye on the Brazilian market, is any indication, tech communities across Africa may soon be flocking to Salvador too.
Politics of access: As TikTok’s troubles have demonstrated, what an app does doesn’t matter as much as where it’s from.
5 The 5G war accelerates
5G could be the backbone of futuristic gadgets like self-driving cars, but before that can happen, the world must decide who will control it.
Despite what your mobile carrier may say in its advertising, 5G has yet to arrive in much of the world. Eventually, the new cellular standard is expected to bring data speeds up to a hundred times faster than its predecessor, 4G, allowing users to download, say, an entire television series in a few seconds. But before we reap the benefits of a widespread 5G network, there’s the small matter of who will control it.
Chinese tech giant Huawei is currently the dominant manufacturer of 5G equipment globally. The U.S. worries that presents a national security risk, and it has successfully pressured some of its allies to boycott Huawei. The escalating tug-of-war between the two nations won’t go away in 2021 and could further fracture the global internet into multiple separate, unconnected networks.
But it won’t be all about the U.S. and China; Switzerland and South Korea already have some of the fastest 5G networks worldwide. It’s still unclear who will dominate the 5G revolution and take advantage of any subsequent economic benefits. In the meantime, the political power struggle over the technology will likely intensify.
6 Political app bans are on the rise
Certain governments have long relied on internet censorship to maintain power. But this year, some began blocking apps and websites during international disputes rather than domestic ones.
After conflict erupted along the border between India and China, the Indian government censored hundreds of apps made by Chinese developers. Among them was TikTok, an extremely popular social media platform in the country. Elsewhere, apps from Wikipedia to Tinder have faced bans of a political nature, and the trend shows no sign of stopping. In 2021, access to apps may well be determined by user location.
For private companies caught in the crossfire, options are limited, though the mechanics of banning apps are often messier than governments let on. Even that could get easier with time. And as it does, more and more citizens may lose important venues for free expression. If you’re an authoritarian leader, that’s a win.
7 Access as soft power
Roads, railways, ports, and bridges have long been at the center of geopolitical competition. In the coming years, expressions of soft power in strategically important regions are turning digital.
In October, Japan, Australia, and the U.S. agreed to finance a combined $30 million to build a spur from a trans-Pacific fiber-optic cable to the tiny island nation of Palau. The project, which would increase data speeds in the country, had an unstated but obvious objective: to counter the growing influence of China in the South Pacific.
Physical infrastructure has often been at the center of geopolitical competition — the “developing world” is replete with roads, railways and ports that bear the name of their donors. China’s Belt and Road initiative, which aims to build transport links from China to Southeast Asia and Central Europe, is remarkable for its scale, but the concept isn’t new.
In the coming years, the focus is likely to shift from concrete to cables. Providing the technological backbone for Asian and African countries’ digital economies will give national champion companies access to huge new markets and would-be hegemons influence over strategically important regions.
It could, as in Palau, give underserved regions access to vital tech; but it could also crystallize the ideological differences between global superpowers, creating new inequalities in human rights, free expression, and access to information.
After the pandemic: Covid-19 changed the world. Here’s what happens next.
8 An uncontrolled “infodemic”
As the coronavirus pandemic has spread, so has an overwhelming amount of misinformation about the virus, creating a parallel “infodemic.”
Social media platforms and governments have struggled to curb Covid-19 misinformation. Some leaders and lawmakers have used the chaos as an excuse to pass far-reaching social media and fake-news laws that will outlast the virus.
According to the International Press Institute, at least 17 countries passed laws during the pandemic that criminalize misinformation in ways that may permanently curb press freedom and make it easier to crack down on online dissent. In Hungary and Russia, spreading “fake news” can now result in massive fines or land you in jail; in Vietnam, posting what the government deems misinformation on social media is now a fineable offense.
Even before the pandemic, some governments, including Thailand’s, were experimenting with policing misinformation on the internet. Covid-19 has provided them with a pretext to expand the state’s powers to censor information. Only once the outbreak ends will the dust settle on how these stringent new laws are to be applied. They will change the ways citizens may express dissent online, whether or not governments are able to bring misinformation under control.
9 E-commerce builds on lockdown-fueled growth
When people couldn’t leave their homes during Covid-19 lockdowns, they turned to e-commerce platforms in droves. Even after a return to relative normalcy, a whole new class of consumers has adopted online shopping.
Online shopping has been growing steadily for a while now, but the pandemic is supercharging that trend. In just a few months, the industry has grown at a pace that should have taken it years to achieve.
Chinese shopping platform Meituan saw a 400% increase in demand for online groceries during the pandemic. In Argentina, the 21-year-old MercadoLibre — with its hybrid model of eBay meets Amazon — rode the pandemic to become the most valuable company in all of Latin America, surpassing the region’s oil and gas titans. And in Southeast Asia, one in three digital service users came online for the first time during the pandemic.
Is this e-commerce boom a bubble that will burst after the pandemic? It’s not likely.
China, where Covid-19 restrictions have relaxed as rates of infection have fallen, offers a glimpse of the post-pandemic e-commerce market. In the second quarter of 2020, Meituan reported a profit growth of 152%. Analysts noted the shift from offline to online shopping continued to increase, even after regions in China emerged from lockdown.
10 Contact tracing apps set an uneasy precedent
Never before have we seen governments collect personal information from citizens en masse at such a rapid speed. While some built contact-tracing apps on their own, others partnered with tech companies. The infrastructure will remain post-pandemic.
Most contact-tracing apps use Bluetooth beacons, which use the proximity of people’s phones to generate anonymous alerts. China’s Alipay Health Code also tracks personal financial activity to see who is violating public-health guidelines.
In some countries, private companies developed the core of the official contact-tracing apps. More than a dozen organizations took part in building out Estonia’s. Uganda’s was donated by a technology start-up. Dozens of countries around the world use Apple and Google’s API as the foundation of their tracing efforts.
How these countries will ramp down information collection in the post-pandemic future remains to be seen. In a perfect world, they would kindly surrender their newfound insights into the private lives of their citizens once the need to contact-trace recedes. That happens often, right?
11 Edtech is here to stay
The education-technology industry was already on the rise, but Covid-19 lockdowns has accelerated its adoption. Even after the pandemic recedes and the logistical necessity of remote education fades, edtech is here to stay.
As the world hunkered down in various stages of Covid-19 lockdown this spring, the scramble to arrange distance learning for children began. For families that could afford reliable internet and mobile devices, a propped-up tablet and Zoom became the go-to solution for teachers attempting to bridge the gap between a physical classroom and a fully online education. For the majority of children, though, it meant low-tech solutions: WhatsApp classrooms and radio lectures.
Edtech companies reading the room saw the pandemic as the perfect opportunity to scale. The market was already valued at $5.9 trillion, and in countries like India and China, the cultural reverence for after-school programming had created a demand for at-home learning even before the pandemic. The Covid-19 lockdowns accelerated the trend in both. In Western markets such as the U.S., where edtech’s growth had been stable but relatively flat, adoption has been directly proportional to stay-at-home orders.
But even after the pandemic has faded, and with it the necessity of remote education, edtech will be here to stay. Consumers have dipped their toe in a burgeoning technology; one Indian firm hired as many as 250 remote teachers in a single day to meet demand.
And as more students and families feel comfortable with remote learning, more demand for teachers will arise. This could create a new class of gig workers: teachers. Imagine a world where booking a tutor for your kid is much like hailing an Uber or hiring an Instacart shopper. Whether that means better working conditions for teachers — and a better education for students — remains to be seen.
Future of tech: Three sectors to watch in 2021 that are being driven by technology born outside the U.S.
12 Gaming’s epicenter moves east
In gaming’s most profitable year ever, half of the industry’s revenue came from Asia. Gaming has always been a global pursuit, but now it’s being driven by new markets.
The biggest video-game publisher in the world isn’t Nintendo or Sony: It’s Tencent. The Chinese conglomerate has poured millions into developing mobile games, a strategy prioritizing Asian audiences rather than Western ones, who spend more time on consoles and PCs.
That strategy has paid off: Global giants now turn to Tencent to convert their console and PC games for smartphones. Activision Blizzard gave the Chinese company the license to produce the mobile version of “Call of Duty.”
And it’s not just China. 2020 saw gaming companies emerge in markets not previously seen before: In Turkey, Peak Games, the country’s first unicorn, was bought by U.S. social-gaming giant Zynga for $1.8 billion this year.
The gaming industry is growing, and that growth is being led by markets outside the Western world. This year alone, the Asia-Pacific region is projected to generate around $80 billion in revenue, half the global total. And by 2023, there will be more gamers in the Middle East and North Africa than in Europe.
13 Surveillance creeps into more and more of the digital world
Nothing digital is private: Social platforms are collecting, marketing, and selling our data. The more people around the world come online, the more eager tech companies are to help countries implement new technologies to surveil and track their citizens.
These days, photos posted to social media carry a greater risk than some #tbt embarrassment. Start-ups like Clearview AI have created facial-mapping software using public social profiles and videos; Clearview’s database of photos culled from social media now numbers three billion. U.S. federal and state law enforcement are already deploying their software in investigations and prosecutions. As protests spread across the country this summer, law enforcement showcased how this data could be used to track suspects.
In China, the ongoing persecution of the country’s Uighur minority would not be possible without the help of tech companies, which have built the government an extensive surveillance network. Hikvision, a Chinese company well-known for its surveillance cameras, has been accused of developing software to automatically identify Uighurs. Dahua, another Chinese video-surveillance company, supplies security cameras across the country for the government, including nearly a thousand that have been installed at mosques in western China.
Demand for surveillance technology, especially at the behest of state actors, shows no signs of slowing down. Tech companies are scrambling to meet it: Despite its being on a U.S. blacklist, Chinese AI giant SenseTime expects sales to rise 80% this year. And facial recognition is getting smarter. One company says its cameras can even recognize people wearing masks.
14 The end of “winner-takes-all” venture capital
The days of mega-bets by venture capitalists are over. Tech investments might become rational (and therefore more sustainable), but it could leave Asian unicorns behind.
Softbank’s first Vision Fund, a nearly $100 billion investment vehicle backed by some of the world’s largest investors, was unprecedented when it was unveiled in 2018. In its early years, the company’s founder, Masayoshi Son, was portrayed as a visionary and a kingmaker, making gigantic bets on businesses that were years away from profitability and giving them outsize financial power so they could dominate their markets. That approach helped to build sprawling tech companies that defined their niches, such as Uber and WeWork.
But even before the coronavirus pandemic hit, the shine had come off Softbank’s winner-takes-all strategy. WeWork’s attempts to go public in the U.S. revealed the fragility of its business model and led potential investors to question its enormous valuation. A second Vision Fund has struggled to get off the ground. Softbank has made it clear that the days of mega-bets are over.
What that means for Softbank’s old stomping grounds in South and Southeast Asia is unclear. VCs complained that the company’s money distorted markets, but they also profited from its profligacy. Some foresee a more rational, sustainable approach to investing in tech. Others fear there might be no one left to champion the next crop of Asian unicorns.