DPI will usher in the next generation of digital economies: CV Madhukar, CEO of Co-Develop

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“The Internet was the first digital public infrastructure. It was funded publicly, built up in US universities and made publicly available – which was then leveraged both by the government and the private sector,” says CV Madhukar, CEO of the Co-Develop fund.

The non-profit organisation was launched in 2022 by the Rockefeller Foundation, the Bill & Melinda Gates Foundation, Nilekani Philanthropies, and Omidyar Network following conversations on the role of philanthropy in advancing digital public infrastructure (DPI), according to Co-Develop’s website. It now supports inclusive DPI initiatives by providing grants, technical assistance, and education efforts.

Most recently, Co-Develop has provided a grant to a Brazilian consumer protection organisation to conduct research into the inclusivity of Brazil’s DPI systems. It also partnered with the government of Zambia to drive the country’s DPI strategy.

GovInsider speaks to Madhukar to understand why DPI will drive the next generation of digital economies, why countries need to urgently attend to DPI initiatives and pave the way forward for DPI projects globally.

From platform-based economies to transaction economies

Though the Internet may have been responsible for the innovations of the past three decades, Madhukar argues that it has ushered in an era in which people depend on siloed platforms that do not work together.

Government has a role to play in introducing interoperable platforms – in the vein of the Internet – that can enable a more inclusive digital economy while supporting private innovation.

“I think the range of innovation that’s happening in India is not matched by almost any other country in the world, including developed countries… what India is trying to do is move beyond the platform economies towards a transaction economy where you can transact more efficiently,” he explains.

For instance, India’s Unified Payments Interface (UPI) enables residents to transfer money with no extra charge across institutions, manage multiple accounts, and receive government welfare payouts – even without a bank account. Anyone with a mobile phone and an Indian digital identity – Aadhaar – can transact with just a UPI-generated QR code, phone call, or text message.

UPI replaced a fragmented landscape of competing digital wallets and payment systems that excluded households without bank accounts. Since 2016, it has become “the default mode of all digital payments,” exceeding all other kinds of digital payments, Abhishek Singh, CEO of the National e-Governance Division previously told GovInsider. 

“You need to be able to break the grip of platforms and ask if we can have email-like interoperability… so I’m not dependent on any particular platform to get the best value,” Madhukar says.

When the government designs infrastructure for inclusion, this will drive down costs, break the grip of fragmented platforms, and ensure the most vulnerable people have access to critical services, he says. Research from the World Economic Forum suggests that UPI has saved India over USD 67 billion in transaction fees since 2016.

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Why time is running out

But countries need to move fast to tap the full potential of DPI before siloed systems occupy the market, making it more difficult to switch to smarter, shared infrastructure going forward.

The United States’ own instant payments service, FedNow, which bears similarities to India’s UPI, has seen slow uptake since its launch in July 2023.

“The advantage that low- to middle-income countries have is that they have very few legacy systems. I believe this will enable them to adopt newer thinking, compared to well-established, richer economies that have massive legacy systems to compete with,” he says.

“We probably have five to eight years to do this. It’s a short window because there are many siloed systems that will occupy the space if we don’t have systems of shared infrastructure… the more you have siloed systems, the more they become legacy.”

This is why Co-Develop, along with UNDP and other partners, has launched the 50-in-5 years campaign, to help fifty countries design, implement and scale at least one DPI component by 2028.

Open source the way forward

Open source will be a critical technology for driving the implementation of safe and secure DPI globally, as governments can tap on reusable components developed elsewhere to get started.

There are common artefacts that every economy needs, which can be leveraged by the private sector and the government – like the Internet, GPS, digital identity, digital payments, and digital verification. 

“These are going to be the foundational building blocks for the next generation of digital economies that we want to build around the world,” he says.

Rather than building new products from scratch, countries can tap on Digital Public Goods like India’s Modular Open Source Identity Platform (MOSIP) to kickstart their DPI journey. The team behind the Philippines’s national digital identity, PhilSys, recently won an award for their successful adaptation of MOSIP, with 83 million people currently registered.

“These are mostly open source public goods that many academic institutions and nonprofits are developing around the world… How do you take these open source code bases and adapt them to countries’ needs?” he asks.

“You don’t have to rebuild the road again.”

Open source can help countries tailor these solutions to better fit their context, build innovations on top, and gain full oversight over the security of their source code – while keeping costs low.

Also read: Accelerating Indonesians’ Internet connectivity sustainably with PLN and Huawei