Technology as enabler of economic growth

The rise of science and technology has been the key driving force behind the growing economic prosperity in the modern world. The use of technology makes it easier to produce goods at a lower cost and thus provide a rate of return more than the cost of capital for entrepreneurs and thus generate value creation. The development of new technologies and the creation of new applications from existing technologies helps to fulfill unmet needs of the society and the society becomes more productive in the process, creating a virtuous cycle of economic growth.

The discovery of electricity and its different applications was perhaps the first major technological tool that ushered massive economic development on a global scale. It made society more productive and led to other inventions in due course of time that supported economic growth for decades.

In recent times, the invention of the Internet has transformed the world into a small global village. People find it easy to communicate with each other and this has made booking a cab, ordering lunch or transferring money extremely easy. The global growth over the last 20 years has been driven by the rising use of the Internet. Nowadays, it is difficult to imagine a workplace with no internet connection.

Nowadays, the work is going at a fast pace to commercialize the applications of Quantum Computing, Artificial Learning, and Blockchain and they have potential to generate a next wave of economic growth.

Free market economy promotes higher return on capital

Wealth creation occurs at fast speed in a free market economy where the intervention by the government is to the bare minimum extent. Capitalist economies support free-market system as entrepreneurs take major decisions based on expected return on capital. This is the reason that the capitalist economies of the world are generally better off compared to countries that try to follow the socialistic model. Capitalistic countries encourage entrepreneurs through lower tax rates and easy regulatory compliance processes. They reward innovation and enterprise through appropriate patents and wealth accumulation. 

On the other hand, socialistic countries put a lot of emphasis on redistribution of wealth through high tax rates and discouraging wealth accumulation. This often creates scarcity of goods and services as socialistic economies operate at less than potential due to deadweight loss on account of higher tax rates. Large scale central planning by governments often results in poor allocation of capital and that leads to low return on capital and ultimately perpetuates poverty.

its all in your mind..!

There is nothing called absolute truth. Each person has his/her view of the world and they are right in their own way. Our personality and the way we are brought up affects the way we see the world. It is more important to learn from each other through our different views about world events rather than getting to the point of proving who is right.
As we all know, a real-life event is generally caused by a number of variables and it is likely that we may disagree about the relative importance of these variables. Even Einstien proved that measurement of time, length and mass are dependent on the state of the observer and no one is absolutely correct.

Similarly, in a democratic setup as in our country, we should respect the views of our fellow citizens and not resort to personal abuse if someone disagrees with our views. There is a way to show dissent and it can be done respectfully in a non-violent way.

Ancient Indians knew the importance of non-violence and that's why religions such as Hinduism, Buddhism, and Jainism originated in our country. Our country placed importance on debate among diverse viewpoints without disrespecting each other.

India facing low economic growth

India is facing an economic slowdown that has severely impacted the creation of new jobs and put pressure on the existing ones. The slowdown can be seen across sectors which is visible in low volume growth in consumption sectors. The capital formation has almost stopped on account of fall in savings and the last component of economic growth, i.e exports have been doing poorly for quite some time.
This slowdown has really put pressure on the government and it hardly has any option in a financial year in which the tax revenues are under pressure due to this prevailing slowdown. It will take some time before India gets out of this slowdown. It is time to reassess the kind of reforms that are required in our country to help create a prosperous country for our citizens.

India needs to quickly get down to low-interest regime to encourage entrepreneurs to invest and create wealth for the society. The prevailing high interest in a low economic growth environment is a deterrent for many investors and hampers wealth creation.

Secondly, the pace of general transportation should be increased in our country to improve the overall efficiency of our economy in converting input into output. Presently, crores of people waste a significant part of their working hours in long commutation. It is something we can learn from China which has built a network of high-speed trains connecting the whole country.

It is time we embrace digital economy to the fullest and this can help to reduce transaction costs in various routine government processes. It can improve the ease of doing business and improve the overall well being of our country

An improvement in overall law and order is important to inspire investors. This can be done by increasing the number of judges in the High Courts and the Supreme Court. There is a strong need to increase the conviction rate to instill fear in the minds of criminals and make India a happier place for our citizens.

Viral infections

The recent CoronaVirus pandemic has emerged as a serious global health concern. It has led to the death of more than 600 people in China and more than 30,000 are still infected with the disease. The Chinese government is trying its level best to contain the spread of this disease and the entire city of Wuhan has been quarantined. It is an extremely infectious disease and has spread to more than 25 countries including the US and India.

It has no proven cure yet and the treatment is based on symptoms shown by patients. The mortality rate from this viral infection is around 2-4%, which is lesser than that of the SARS epidemic in 2003. However, the current viral strain is highly infectious and even 15-30 seconds of contact with an infected person can spread the disease. It reminds us of the deadly Spanish Flu of 1918 which had wiped out 3-5% of the global population, in impact only less than the Black Plague of the Middle Ages. The Spanish Flu had led to around 17 million deaths in India alone and its effect was visible in negative population growth in India in the decade of 1911-1921.

The international community needs to learn from the current outbreak. A proper policy needs to be developed to prevent transmission of such novel viruses from animals to humans. Moreover, the communication protocol needs to be transparent to flag such issues in real to minimize loss of life. The medial R&D needs to develop a broad range of medications that can be effectively used during such flu outbreak.

Social Reforms

Globally, economies tend to grow faster if there exists a right social fabric that encourages innovation and out of box thinking. During medieval times, churches had strong influence on the western societies and it was taboo to challenge exiting ideas. The Renaissance started in Europe in the fifteenth century and it inspired people to expand the existing knowledge through reasoning and experiments. Consequently, Europe became a leader in the scientific knowledge and it led the development of the entire globe.

                               However, India is still engulfed in religious dogma that has stifled the growth of the Indian society. People still attribute sufferings/diseases to result of their past actions. The believe on Horoscope and Kundli has created a mediocre society that believes that success can be achieved through rituals. Many self proclaimed god-men take advantage of this fear and greed prevalent in society and the result is the emergence of a backward society that is unproductive and ossified. India needs to take a lot of steps to create a society that is based on scientific temper, as envisaged by our first Prime Minister, Pt Jawaharlal Nehru.

Promoting economic growth!

It has been almost 7 years since the world was hit by financial crisis unleashed by the collapsed of  Lehmann brothers. Global growth is still sluggish around 3%. Europe is struggling with its own set of problems causing by huge debt burden in countries like Greece, Italy, Iceland. Chinas economy  has found a new normal and is growing at 6-7% pa. Unemployment is a big issue globally as  low demand environment does not incentivise investments. Automation and use of robots has been taking away low skilled jobs in both developed and developing countries. We have almost plucked all low hanging fruits as far as technological innovation is concerned

The path ahead is not easy and will require joint effort from the international community. We should shun trade protectionism and promote free trade of goods and services. This will provide employment opportunities and the wealth created in the process can lift millions out of poverty.

 Secondly, low cost technological solutions for  problems facing mankind should be developed by collaborative effort of scientist across the world. Example: LED based bulbs have changed the lighting industry. These bulbs are much more effective in term of lumen output and they consume just fraction of power compared to conventional bulbs. Similar GPS enabled mobile phone with an Internet connection has made it extremely easy to move around in a foreign locations. These are just a few examples to show the impact technology can have on economic growth of the world.