Open Digital Ecosystems (ODEs): The inevitable next frontier

Every couple of years, technology grows leaps and bounds. On the hardware side, it has been Moore's Law that has been mapping the trend, with computing power growing exponentially over the last two decades or so. On the software front also, better abstractions are possible lowering the barriers of entry when it comes to programming. The software has truly eaten the world, permeating in every sector and continues to do so. So, what's the next frontier? Let’s dive right in.

Readers of this article probably must have come across web3/ NFTs/ crypto/ defi. As one tweet succinctly put it:

Web1: consume/read
Web2: consume/read AND produce
Web3: consume, produce AND own

Nikhil Kurhe, CEO, Finarkein Analytics

Now here's why ownership is significant. With so much of our time being spent in the digital world, we leave a footprint. Trillion-dollar Web2 giants were built on our data, which we produced and consumed. Yet we never saw a cent of that value. Web3 aims to create a better and more equitable internet by allowing ownership, control and in turn a claim to wealth that would be generated.

While everyone is looking at web3 from a crypto lens, I would argue that there are other means to achieve similar principles, and guess what, they're being built in broad daylight. Through a collaboration of robust governance principles and collaboration between community and other entities, Open Digital Ecosystems are being built. In fact, you may have used a couple already.

From opendigitalecosystems.net, Open Digital Ecosystems (ODEs) are “open and secure digital platforms that enable a community of actors to unlock transformative solutions for society, based on a robust governance framework.”

Consider this, what if everything from roads to transportation to health and more were fully privatized, with no public alternative? It's highly unlikely that people would be okay with such an arrangement. Yet the same seems to have been the norm for our digital lives until very recently. ODEs are stepping up to be the Public Digital Goods that can and will create a more equitable digital world.

I think the most popular ODE that we all may have come across and probably use on a near-daily basis is the India Stack, the set of APIs and protocols which define and allow us to use services like Aadhar and UPI. Quite a few of these ODEs are in the works though. In the financial services sector, we have the account aggregator (AA), India's take on Open Finance. We also have OCEN, the open interoperable protocol to democratise lending by moving to information collateral that another ODE, AA, is providing. Unified Health Interface (UHI), under the Ayushman Bharat Digital Health Mission, another ODE that will create a robust protocol to bring interoperability and openness to our digital health infrastructure. These are just a couple, many other projects like Beckn are in the works which will emerge as Public Digital Goods that will unlock massive efficiencies and enable further innovation. Pilots and larger-scale rollouts are live in multiple ODEs.

Now you'll notice, we started with web3, and ended up at ODEs. In fact, some or most of these ODEs are National ODEs or NODEs to some extent, usually involving a regulatory or a community authority/SRO like an NHA or Sahamati or NPCI. The author hears your protests about web3 being all about decentralisation and no central authorities, and yet I feel otherwise. Web3 at its core is about ownership. Concepts like decentralisation, DAOs, blockchain allow for robust and equitable governance mechanisms, but surely that's not an exhaustive list. The way ODEs are being built, backed by the Data Empowerment and Protection Architecture (DEPA), ODEs are building open and interoperable ecosystems. The flow of data and actions through these public digital goods is defined in a manner such that we the creators of our digital footprint are drivers and not passengers. Only with our consent are things moving around in ODEs. Going from here to ownership as per the 'traditional' web3 definition is only a stone's throw away I'd say.

Now the readers may be wondering what good are these ODEs? We've had technology companies for a while now who've built massive data and digital ecosystems for a while now, so what will ODEs do differently? The incumbent systems were run and controlled by private entities whose objective was to maximize value for shareholders. More often than not, that meant user engagement and advertising. Web2 quickly devolved into a loop of where data drove engagement and better targeting which drove content and repeat. But a single word, 'Open', fundamentally prevents us from going into this loop again with ODEs. With ODEs, multiple entities, public, private, non-profit, communities can all participate and go after a much more diverse set of problems. Problems previously thought unsolvable either due to economic constraints or technology-related barriers can be solvable and will be solved. The sheer opportunities that ODEs present for participants are mind-boggling. From a monetary lens, BCG and Omidyar Network India pegs ODEs as a $700 billion opportunity in India alone.

Author: Nikhil Kurhe, CEO, Finarkein Analytics