Data is the new gold: That’s the new truism of the data economy. And that’s why Google secured access to the health data of the second largest health system in the USA, Ascension. That’s why traders on Amazon Marketplace call for “data sharing”, which enables these traders to optimize their Marketing campaigns, inventory and shop design (Note: Amazon along with Amazon Marketplace scoop up 50% of eCommerce Sales in Germany). In short: Key to success is increasingly data, data, data.

Data is the basis for making workflows more efficient or for automating them entirely, for optimizing warehousing, optimizing customer engagement and much more. On the Data Intelligence Hub of Deutsche Telekom this is illustrated by taking a logistics service provider as an example: “With the help of the Data Intelligence Hub, the service provider is able to provide a more accurate forecast for any shipment by analysing a merged data pool of his own data, imported weather data and existing historical shipping data with current traffic data on ship canals.”

Do we have enough data? Or let’s put it differently: Does the German economy or rather European economy have access to a sufficient amount of data to remain a stay a serious player in the game of the data economy – next to the US and China? The managing director of Accenture in the DACH region, Frank Riemensperger, points out that Germany has exported more than 1 billion devices and machines. This constitutes an excellent base (or: starting point) for data collection and the offering of services, that are based on data analysis with machine learning algorithms (predictive maintenance, optimization of productive uptime, etc.).

China has left no doubts about its ambition to attain technology leadership in AI and data economy by 2030 – and its focused strategy is bearing fruits already. The bestseller “AI Superpowers. China, Silicon Valley and the New World Order” provides mindboggling insights into the thriving Chinese Tech Industry. It wouldn’t be overly pessimistic to state that Germany/Europe is dramatically lagging behind. Only last September the Chief Innovation Officer Jonathan Larsen of Ping An, provided a striking example in a Key Note Speech at a FinTech summit. Ping An, a Chinese financial institution, pursues a focused strategy of AI, Blockchain, Datamining. For this purpose, the company not only has 30,000 employees in the R&D area at its disposal, but also the data of approximately 500 million Internet users, 200 million customers and 400 million annual service calls. For comparison: The Deutsche Bank has about 20 million customers in Germany, the Commerzbank about 18 million private and corporate customers.

These “economies of scale” of Chinese (and also: US-American) Companies are huge – whereas national boundaries and European competition law leads to a fragmented structure of the European market (and thus: No big tech players with significant economies of scale). One answer is cooperation between German and other European companies. The fact that these are increasingly coming about is evidence of the strategic predicament. Just think of the joint venture Share Now between Daimler and BMW, or the cross-border cooperation between Deutsche Telekom and its French counterpart Orange in the development of a language assistant (which hasn’t been a great success, compared to the likes of Alexa and Google Assistant).

Corporate Europe should think beyond cooperation in the European Economic Area. Be bold: Why not India? For sure, India is by no means as economically important as China (just one-fifth of China’s GDP), and the middle class here has even less purchasing power. But in terms of population, India is in the same league as China, in 2025 India will even overtake its neighbour in terms of inhabitants. India is the worldwide second largest mobile phone market, the technological affinity of Indians is very high. In addition, India has a powerful IT industry as an implementation partner for a data / data analysis strategy. What about a cooperation between the eCommerce player OTTO.de and its Indian counterpart Flipkart: Flipkart achieves a market share of approx. 44% in India with approx. 80 million products on offer and approx. 8 million shipments per month. Both eCommerce players are in main competition with Amazon – Note: They do not compete on any market.

There are major national players with a large customer base in all sectors: in the banking sector, for example, the State Bank of India (SBI) with about 400 million customers, over 24,000 branches in India and a global footprint in another 35 countries. In the telecommunications sector, Reliance Jio has more than 400 million customers, India’s largest online grocery retailer BigBasket has over 10 million registered users, the product range includes 20,000 products, and about 1 million orders are delivered each month. The airline IndiGo with a market share of almost 50% in domestic flights, a total of about 65 million passengers (about half of the figures at Lufthansa). The largest online travel agency platform MakeMyTrip sells about 15 million bookings or travel packages annually, with about 20 million users active via desktop and another 25 million via mobile.

Of course, the European economic area and India are different in many respects, the cultural context is different, the weaker purchasing power of India consumers causes different demand patterns, different requirements for products and services; however, the urban middle class is increasingly converging towards the western pattern in lifestyle and consumer behaviour. Besides, India and Europe are well comparable in terms of language and cultural diversity, and it is precisely this heterogeneity that must be reflected in data strategy and data science models anyway. This heterogeneity can therefore be a decisive advantage: The sooner these analytical models take other cultural contexts and other demand patterns into account, the more universally applicable they can be.

The vision of such an Indo-European cooperation should not only be supported by companies, the government can also make a decisive contribution here. To date, India does not yet have a data strategy or AI strategy, let alone an ambitious program that is even remotely comparable to China’s AI strategy. I had the opportunity to discuss this issue in a small group with one of the government spokespersons, Mr. Nalin Satyakam Kohli (Supreme Court Advocate and National Speaker of BJP). He indicated that work is being done on it, in short: there is a possibility to influence, there is a willingness to talk. It is clear that such a cooperation would create a clear win-win situation from which not only the cooperation partners involved, the Indian IT industry (as implementation partner) and the economic development of India would benefit. And of course the European partners.

And did you know: In the issue of The Economist of April 4th, 2020 you could read that among the TOP10 Global Unicorns there is also an Indian start-up, namely the FinTech company One97 Communication. There is no European company among the TOP10, but 4 unicorns from China, 4 from the USA and one from Singapore.

Sebastian Zang
Author

The author is a manager in the software industry with international expertise: Authorized officer at one of the large consulting firms - Responsible for setting up an IT development center at the Bangalore offshore location - Director M&A at a software company in Berlin.