Big Tech reliance can trap emerging economies

In today’s global economy, data is currency, and emerging markets are spending it without control over where it goes. Small and medium-sized businesses across India, Indonesia and Brazil run their daily operations through platforms like WhatsApp that serve as their storefront, order book and customer-care center. When an app like this changes its privacy policies or business tools, millions of livelihoods feel the ripple. What seems like a minor software update in Silicon Valley can rewrite how local economies function.

Even the brightest local startups, built with ambition to serve their communities, often depend on developed-market capital and cloud infrastructure. A promising fintech in Nairobi, Kenya, or Jakarta, Indonesia, might proudly call itself “homegrown,” yet its servers sit on Amazon Web Services (AWS) or Google Cloud, and its seed funding flows from investors in California or London. This interdependence fuels growth but also quietly shifts control outward.

India’s leading software-as-a-service (SaaS) companies, such as Zoho and Freshworks, rely on global cloud networks for scale. When AWS suffered a global outage in 2025, customer support systems, payment gateways and logistics software in multiple emerging markets went offline for hours — a stark reminder of how fragile this reliance can be. For economies trying to modernize through digital transformation, that fragility can quickly become a national risk.

Why dependency becomes a vulnerability

The same asymmetry that defines cloud dependence also shapes financial flows; both expose developing economies to external shocks. In 2022, Wasoko, a Kenyan business-to-business (B2B) commerce platform connecting informal retailers with suppliers, raised $125 million from global investors, including Tiger Global and Avenir Growth. At the time, Africa’s startup ecosystem was surging, powered largely by venture capital from developed markets. But when interest rates climbed in the U.S. and Europe, global funds turned defensive. Within a year, Wasoko’s valuation was reportedly marked down by nearly 60%, and the company paused its merger with Egyptian startup MaxAB and scaled back expansion plans.

This downturn had little to do with Wasoko’s operational performance; it was collateral damage from monetary and investor decisions made thousands of miles away. As developed-market investors rebalanced portfolios toward safer assets, liquidity in African venture funding fell sharply. According to the emerging markets intelligence platform Briter, overall startup investment across the continent dropped by more than 35% in 2023, forcing many promising ventures to lay off staff or defer product launches.

Wasoko’s story reveals how capital dependence creates strategic fragility: The fate of a Nairobi-based logistics company hinged on interest rate changes set by the U.S. Federal Reserve. When the cost of capital rises in New York, innovation stalled in Nairobi.

Building independence through local innovation

The path forward lies not in isolation, but in collaborative independence, building robust local ecosystems that can integrate globally yet sustain themselves locally. India’s Unified Payments Interface (UPI) offers a blueprint. Created as a public digital payment infrastructure, UPI connected banks, fintech and consumers through a simple open protocol. Within five years, it transformed India into one of the world’s fastest-growing digital payment economies. Today, UPI processes over 10 billion transactions a month and is being adopted internationally in countries like Singapore and the United Arab Emirates, providing evidence that indigenous innovation can compete globally.

Similarly, homegrown software platforms such as Koo — India’s alternative to Twitter — show that local solutions can thrive alongside global players. In Southeast Asia, GoTo and Grab have created digital ecosystems for transport, commerce and finance that cater to local needs while reducing dependency on foreign services.

When emerging markets invest in education, digital literacy and startup infrastructure, they cultivate a generation of builders who can create platforms designed for their own realities, languages, payment systems and consumer behaviors. Cross-country collaboration among emerging markets can amplify this effect. For instance, India’s digital public-goods model could inspire African and Latin American nations to design their own interoperable payment or data-exchange frameworks.

These initiatives not only strengthen economic resilience but also expand global competition. A more diverse digital landscape where multiple nations contribute meaningful technology fosters innovation, affordability and shared prosperity.
Digital dependence has accelerated growth across emerging markets but has also exposed a quiet vulnerability. When data, infrastructure and investment flow almost entirely through developed-market channels, the balance of power tilts outward. The solution isn’t to close doors, but to build strong, open ones, local technologies, regional partnerships and fair competition in ways that empower countries to thrive on their own terms.

As emerging markets develop their own digital infrastructure — like India with UPI — they not only safeguard sovereignty but also help shape a more balanced and innovative global economy. A world where every nation can create, compete and connect on equal footing isn’t just fairer; it’s smarter, more stable and ultimately more peaceful.

About the author

Amreeta Sengupta is an MBA candidate in the Johnson Cornell Tech MBA program in the Cornell SC Johnson College of Business and a Forté Fellow specializing in product management and innovation strategy. With a background in embedded systems engineering at Qualcomm, she focuses on the intersection of technology, global markets and digital inclusion. As president of Cornell Tech Women in Tech and a Cañizares Center for Emerging Markets contributor, she aims to bridge technological and social impact to empower innovation in developing regions.

All views expressed in articles published on the Cañizares Center for Emerging Markets webpage are those of the author(s) and should not be taken as reflecting the views of the Cañizares Center for Emerging Markets.