Tech along wisely
Tech-ing the path towards resilient and equitable growth
The steam engine. Electricity. The computer and the Internet. These are among some of the inventions of the modern world that have fuelled rapid economic growth by creating employment, increasing productivity and generally transforming the way we work.
But the rapid technological advancement in the 20th century has also left us with some undesirable by-products. Now in the 21st century, as the world is going through another round of unprecedented technological discoveries, will we be able to learn from the past and not repeat the same mistakes?
Increasing productivity, transforming lives
In the 1950s, economists measured America’s economic growth and found that the input that went into productive processes only contributed to 15 percent of the actual growth in the output of the economy. The remaining 85 percent of growth in output, surmised the economists, must have been largely due to technological innovations.
“Technological breakthroughs invade every aspect of our lives,” wrote W. Michael Blumenthal in ‘The World Economy and Technological Change’ in Foreign Affairs’ 1987 issue of ‘America and the World’. His words ring true even till today.
For Blumenthal, the development of the microprocessor in the 1960s was one of the most profound and powerful inventions, with far-reaching effects on communication and transportation.
“Our capability to establish virtually instantaneous worldwide electronic links, combined with the technology of television satellites and jet transportation, has revolutionised how we live, where we go and what we do,” he said.
But many were left behind
Technology should have transformed the world into a better place. But this Utopian ideal did not materialise,
back in 1987 when Blumenthal wrote his essay.
In fact, the world was coming closer to a Dystopian state towards the end of 20th century. Technology was widening the chasm between the haves and have-nots, exaggerating the instability of economies, and underscoring the inability of institutional frameworks and governments to adapt to rapid technological change.
Blumenthal lamented that the United States was burdened with a federal budget deficit of unprecedented proportions, had an unstable currency, was unhealthily dependent on unreliable external sources of energy, was experiencing unprecedented securities market uncertainties, and suffered from high levels of poverty and disparities.
Meanwhile, other sophisticated economies fared no better at the time, with Japanese jobs being displaced by competition from newly industrialised countries, and unemployment rising to postwar highs in some European countries. Fast-forward to 2015, and the situation in these developed countries remain uncannily identical.
Blumenthal suggested that obsolete institutions and outmoded rules created the uncertainty and tensions that have adversely affected the quality of macroeconomic management in our newly pluralistic world. As money moves across global markets instantaneously, and as world financial and banking centres become more closely integrated, new rules are required to ensure that markets can function smoothly. Blumenthal advocated for key standards to be developed for international banking and finance, including accounting rules and the national treatment to be accorded institutions established on foreign soil.
Continuing with the point that global trade and finance are now linked in an unprecedented manner, he stressed that governments have to realise their structural interdependencies and adjust institutions to deal with a whole range of issues which simply did not exist at an earlier time, and which can now significantly influence the course of economic affairs and international relations.
“We need to give greater attention to the issues and implications raised by the deep impact of technological change on our lives,
on what we do and how it is done. What is missing is a better and more comprehensive analysis and an integrated view of the new issues underlying our current economic problems in light of technological change,” Blumenthal concluded in his article.
A new ray of hope in the 21st century
However, it is not all doom and gloom. Over the past three decades, technology has become part of our social conscience. With a younger generation that is combining social consciousness with their entrepreneurial spirit and the power of social media, many innovative methods have been developed to address society’s problems.
These innovations, termed ‘catalytic innovations’, not only disrupt the status quo in terms of the way solutions are delivered, but also reach the underserved groups of the population, where the social problems lie.
Today, many catalytic innovations are attempting to meet the needs of the underprivileged, but the challenge will be to ensure that these solutions are scalable, sustainable and systemic.
In a paper presented at the 2003 OECD Conference on Innovation and Growth in Tourism, the late American economist Nathan Rosenberg wrote that the impact of a technological innovation will generally depend not only on its inventors, but also on the creativity of the eventual users of the new technology.
Similarly, technological innovations will not positively transform lives unless they are applied towards solving the world’s problems.
We are living in a golden age. How do we want to be remembered – for the way we brought the world together, or the way we pushed it apart?
This topic was explored at the 11th WIEF sessions on “Understanding the Potential of Artificial Intelligence”, and “Biotech Startups and Their Role in Bioeconomy”, and in IdeaPad’s “Mobile Apps and Digital Content” and “Healthcare Technology”.