Technomy and good governance can improve the economy

J Mulraj | Updated on January 03, 2020 Published on January 03, 2020

The future will bring revolutionary changes in our lives, and technologies being developed can help transform economies, and lives, provided we are ready to embrace them and have the elements in place to adopt them. This calls for our polity to concentrate on technomy (a mix of technology and economy) and on good governance.

Some problems have easy fixes, requiring some decision-making deliberations and allocation of time. There are some 410 vacancies in the Supreme Court (up from 392 at the start of the year) and many many more in lower courts. There is no justification at all for dragging feet over filling them. India’s score on ‘Enforcing contracts’ in the Ease of Doing Business is one of the poorest in the world and the backlog of undecided cases is legendary.

The government must also brainstorm on several emerging technologies. Road Transport Minister Nitin Gadkari has a lot of achievements, and is a clear-headed go-getter. Yet, he is vehemently opposed to autonomous vehicles, primarily due to its impact on jobs for drivers. (Besides this, autonomous vehicles also requires decent roads, which India does not have, and driving discipline, which is abysmal, hence its adoption would be a long way coming). But the adoption of the technology needs debate. Autonomous vehicles will cause significantly fewer accidents and will also release public spaces for, perhaps, parks, thus contributing to lower mortality and greener environment. There will also be significant savings in fossil fues and in freeing up time spent in driving the vehicle, for other uses such as business or social interaction.

So the use of emerging technologies needs to be examined holistically and the cost/benefit analysed dispassionately.

3D printing is another area. This can, conceivably, be used to print vital organs, bones and cartilage, thus benefiting medical care. Things such as clothes, shoes, etc, can be printed at home, to customer specifications. The designs, eg, of a shirt, can be chosen online, and bought. The designs would give instructions to the printer and a custom-made shirt would be printed at home. This would have huge impact on retail stores, which stock multiple designs in multiple sizes, not all of which can be sold. Large retail chains, including famous names like GAP in USA are already downsizing. So here, too, there would be job losses if retail stores shut down; and policy makers must brainstorm about how to prepare for it. The march of technology cannot be stopped, only better prepared for.

Another fast developing technology is crypto currency, or digital money. This can be either adopted by governments (eg. China is launching its own digital currency linked to the renminbi) or remain without any control, such as Bitcoin.

Even as other countries are adopting them, or their political leaders are inviting knowledgeable people to learn about them, India’s RBI has simply banned them. Is the ban based on a deep study or on a fear of the unknown? In banning investors from investing in crypto currencies, RBI and SEBI have done them a disservice, because Bitcoin has appreciated 90 lakh per cent in a decade.

In fact, our regulators have a propensity to ban, rather than understand, new things, ideas and developments. For example, a little after ETFs became accepted and popular, one fund house, Benchmark, sought permission (some 35 years ago) to launch an ‘inverse fund’. These were launched and accepted in the US, so there was no reason to disallow them, as SEBI then did. An inverse fund behaves in a diametrically opposite manner. Hence, if an investor feels that the market is likely to go down, he can buy an ‘inverse fund’. If he is correct, and the market goes down 10%, his fund would appreciate 10%. Why should such products not be allowed? Is the ban based on a study of the product (surely 35 years is enough for a study) or on fear?

Availability of drinking water is another challenge that technology has a solution for. Some 78.5 crore people do not have access to drinking water. Technologies are available. An American company, Zero Mass Water, makes solar panels that capture moisture from the air and condenses it to produce water, which is then sterilised and mineralised.

People will have to be prepared for such massive, disruptive changes. They should be told that they would need to develop different skills; job losses in one area would be compensated by growth in another. But for this to happen, the political class must be competent, forward looking, and open. Not greedy to enjoy the spoils of office, obtained from a surname rather than merit.

The prolonged monsoon has helped raise the water table and augurs well for agricultural production in 2020. Oil prices too are contained, for now. But will we help ourselves?

The writer is India Head — Finance Asia/Haymarket. The views are personal.

Published on January 03, 2020
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