This article originally appeared in the November 2015 issue of 425 Business.
The last weeks of September were busy ones for Mark Zuckerberg. On the 23rd, the Facebook CEO was in Redmond for the visit of Chinese President Xi Jinping. Zuckerberg’s website is blocked in China, but there he was, speaking Mandarin with Xi at a tech summit hosted by Microsoft.
Four days later, Zuckerberg was back on his home turf in Palo Alto, in Silicon Valley, meeting with another Asian leader, one who uses Facebook and welcomes it in his country. On the 27th, Zuckerberg hosted a question-and-answer session with Narendra Modi, India’s prime minister. The two had an open, candid, and at times emotional discussion about social media, job creation, and social mobility.
Zuckerberg’s meetings highlight the stark difference between Modi, Xi, and the nations they lead, both of which are seen as ripe territory for tech companies to expand their footprints and make boatloads of money in the process.
Tech luminaries gathered in Redmond to greet Xi and nab a yearbook-style photograph with him; in Silicon Valley, it was Modi doing the visiting, which included private meetings with Microsoft’s Satya Nadella and Apple’s Tim Cook, as well as a trip to Tesla’s headquarters. Xi’s visit featured tightly scripted, buttoned-down visits and dinners. Modi was speaking at sold-out arenas and going door-to-door with Silicon Valley’s business and academic elite. Xi’s visit was conciliatory; Modi’s celebratory.
“The difference in China and India in terms of their political systems can explain a lot of why the visits looked so different,” said Sunila Kale, an associate professor at the University of Washington who studies South Asia. “Everything that Modi is doing projects back to India … and the very vibrant sphere of electoral competition.” Xi, as president of a communist state, doesn’t have to worry about such campaigning.
With Xi stateside, it’s as though tech leaders simply wanted to be recognized by the leader of the world’s second-largest economy, one that’s fast becoming more technologically advanced and features a swelling middle class. China’s leadership heavily censors the Internet, though — like Facebook, many Google products also are blocked in China —and it strongly urges state-run agencies and companies to use services built in China, a move that has affected Microsoft’s interests
in the nation.
“(American companies are) moving away from what would be a traditionally unfettered market where these firms are competitive and have products to offer to figuring out particular niches in Chinese markets where they can still make profit,” said David Bachman, a UW professor who studies China. “When you’re talking about an Internet population now approaching 700 million, even if it’s pretty marginal activity, there’s a large number of potential consumers.”
India’s embrace of technology, on the other hand, falls more in line with Western ideals of an open Internet. One of Modi’s most-publicized initiatives is Digital India, which aims to make government services available electronically to India’s 1.25 billion residents.
Kale said the grand ambitions of Digital India also have marketing value for Modi. “His campaign has been quite savvy about marketing and branding. … It’s playing into these new ideas of a rising India that doesn’t have to worry about basic rights about food and education, but can think much more expansively about digital access,” she said. Basic infrastructure remains an issue, and a barrier to Digital India’s implementation: Modi wants all Indians to have Internet access, yet an estimated 300 million Indians don’t even have access to electricity.
But Modi’s embrace of technology helped get him elected in 2014, and India has a growing presence in the tech world. Indian-American CEOs lead Google, Adobe, and Microsoft, and it’s estimated a quarter of Silicon Valley’s businesses were founded by people of Indian descent.
Proponents of a wired India increasingly see its relationship with U.S. tech firms as symbiotic. After the Immigration and Nationality Act, which established foreign-employee visas such as the H-1B, was signed in 1965, Kale said many Indians worried the nation’s smartest and most talented residents were being siphoned away. “But in the last 15 years, that rhetoric has shifted,” she said. “People talk about the outflow of these very successful migrants having this return effect to India in the form of new investments, new ideas being shared, and a lot of venture capital that gets reinvested in India.”
Modi touted India as open for business, while Xi said China is open for business, with conditions. He said U.S. firms must understand the “national realities” of working in China, a comment referencing the Communist government’s wary stance of the open flow of information favored by Western tech companies. Xi did promise to curtail cyber attacks, though China experts are widely skeptical of those comments. There also is concern about electronic privacy in India. Prior to Modi’s Silicon Valley trip, a letter signed by 100 academics denounced Digital India as a method of increased surveillance over the Indian people.
Modi’s and Xi’s visits put in perspective the tech industry’s foothold in two of the world’s largest markets. In China, firms just want more exposure. Microsoft, for example, has struggled with piracy in China, and the Chinese government banned Windows 8. Meanwhile, as India’s online presence grows, tech firms hope to latch on to a more willing national partner, perhaps convincing China to liberate its online
stance in the process.
“For the (Chinese) regime, the idea of free information, of uncontrolled information, is not one they’re prepared to accept,” Bachman said. So while China remains inclined to promote local tech firms — Alibaba instead of Amazon, Weibo instead of Facebook — India’s Internet development, if infrastructure development keeps pace, could more closely resemble the Western tech scene.
“India has a lot of high-tech competence in some of these fields and will want to develop some of its own firms,” Bachman said. “Whether that is complementary with the U.S., or becomes competitive with the U.S., we’ll have to see.”