India: Technology’s Next Frontier

The tech sector has been booming for so many years, it’s hard to envision anything else. For many investors, the future, innovation and technology are all synonyms.
However, this appears to be changing. Mary Meeker, general partner at Kleiner Perkins Caufield & Byers, has released her much-anticipated Internet Trends report. This year, the report is a little bit bleaker than usual: the percentage of new internet users is relatively flat and smartphone growth is slowing worldwide. Furthermore, the barriers impeding new internet adoption – illiteracy, inadequate infrastructure, gender, geography and poverty – present no easy fixes.
However, amidst this global slowdown, one region offers a beacon of hope for the technology community. India is proving to be a major region of growth and adoption. For investors willing to take on the risks associated with emerging markets, this nation appears to be one of the best bets for smart tech investors.

Worldwide slowdown

Back in the mid-1980s, North America, Europe, and Japan represented 63 percent of global GDP. Correlated to this dominant GDP was their rapid and enthusiastic embrace of the tech market. Last year, however, their contribution to worldwide GDP dropped to just 29 percent. For Meeker, this slowdown in GDP is linked to slowing adoption of internet and smartphone platforms for new users.

Meanwhile, emerging markets in Asia took their place to represent 63 percent of global GDP last year. Therefore, it’s no longer Silicon Valley that tech enthusiasts should be looking to for the most innovative and important developments. It’s the emerging markets in China, the broader Asia Pacific region and even India that are seeing the highest rates of adoption and growth.
China holds the first place spot when it comes to the global tech market but, as previously noted, savvy investors should be looking to India as well. In 2015, the country surpassed the U.S. to become the second largest global market.

Investor takeaway

What this means for investors is that China and India are some of the best places to look when it comes to tech investing: China for its current dominance and India for its growth potential. Companies like Datawind (TSXV:DW), then, seem like some of the most intuitive options for investors. Essentially, the company sells low-cost mobile devices and internet access to emerging markets in India and Africa through its browser app. As CEO Suneet Singh Tuli told the Investing News Network, “we have developed a method of compressing mobile data by a factor of 30 for internet access on mobile devices. That is 10 times less data than anybody else.” To learn more about Datawind, click here to read an exclusive interview with Tuli.
All told, emerging markets are where it’s at when it comes to the future of technology investing. While internet and adoption has slowed around the world, India (and economies like it) are proving to be the next horizon for the tech revolution.

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Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.