I am delighted to announce the launch of the Innovation Hub for Prosperity, a website I have had the pleasure to work on together with a highly talented team of professionals from Cambridge Judge Business School in the United Kingdom and India's Foundation for Interoperability in Digital Economy (FIDE).
The purpose of the website is to disseminate information to business owners, consumers, start-ups, and policy-makers about benefits of open transaction networks on the internet.
Why open networks? There are two hugely important reasons, namely competition and interoperability of systems.
With respect to competition. today too much online business is dominated by large closed platforms that act as quasi-monopolies, which naturally tends to restrict choice, stifle competition, underpay suppliers, and overcharge consumers. Western governments are spending billions to fight the big internet monopolies in the courts, but there is a better way. It is smarter and far more efficient to increase competition by augmenting the internet so that the infrastructure required online transactions is availlable for everyone to use. This lowers barrier to entry and immediately undermines the monopoloy power of the current online commercial giants. You don't even need to close down the existing e-commerce platforms.
Consider how access to a completely open e-commerce environment might impact the every day life of a typical Western consumer. Suppose the consumer is a movie buff. She loves specialist art-house movies and she wants to be able to rent or buy any movie she wants, any time she wants. Today, she cannot do this. Instead, her choices are confined to the narrow time-restricted selections on offer on Netflix or Amazon Prime. With an open network she would be able to watch any movie she wants, any time.
Suppose another consumer is looking to book a hotel. With an open network, he would not just see the limited options on Booking.com, but he would also see all the properties available on Trivago.com, Hotels.com, Airbnb.com as well as all the hotels listed on any other platform and hotels that are not listed on any platform at all!
The bit of technology that opens up the transactions universe to anyone is is a simple plug-in protocol called Beckn, a free public good. Beckn works with any conventional interphase, such as a website, mobile phone, or app. Beckn is to online commerce what the HTTP protocol is to internet browsing, the GPRS and GSM-IP protocols are mobile telephony, and SMTP, POP3, IMAP/API protocols are to email. For example, is the SMTP, POP3, IMAP/API protocols that enable email messages to be exchanged and read on competing platforms, such as Google, Outlook, or Apple Mail.
Beckn therefore makes entirely different platforms and software systems interoperable. The benefits of interoperability are difficult to exaggerate. Previously isolated systems can suddenly communicate without the need to invest in hugely complex and expensive and overly complicated software solutions. All you need to do is install Beckn and then, with a few modifications, the systems can transact with each other. Note that transactions need not be commercial.
For example, open network interoperability can be extended to the public sector with obvious applications. A computer system in, say, a Finance Ministry, can transact with an entirely different and previously incompatible computer system in, say, a Health Ministry, so that resources can be channelled from the former to the latter in line with demand. This can mean enormous savings in the public sector. Payments systems can thus be linked directly to public service delivery. Poor people can be brought into the formal economy, so they can more readily be reached in order to receive critical public services like education and healthcare (and pay taxes!).
Interoperability also has huge applicability in the private sector. Beckn embeds the infrastructure required for all the stages of commercial transaction management, including catalogue management, product search, cart building, payment gateways, order fulfilment, delivery, returns and cancellations, dispute resolution, and reviews. Once installed, these functions can be used with any other system using Beckn. Thus, in India, for example, charging network operators for electric vehicles (EV) have set up a facility called United Energy Interface, which overcomes the erstwhile challenges of in reconciling payments systems and other aspects of transactions in the EV charging industry (see here).
Interoperability clearly also has massive potential in stream-lining supply chains and improving the efficiency of stock management in any sectors of the economy that involve supply chains. For example, companies in the same industry can help each other smooth out production bottle necks. These benefits carry over to all branches of manufacturing, the food and beverage industry, restaurants and hospitality as well as banking, public transport, taxi services, healthcare, education, retail shopping, etc.
For some examples of existing use cases, see here.
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Note: For additional discussion of the economics of open networks, see here.