Michael Spence, the 2001 winner of the Nobel Prize in Economic Sciences, expressed his opinions over digital economy on Monday during a conversation with faculty and students at Bennett University in Greater Noida.
Economist A Michael Spence, a Nobel laureate, noted that India is a significant economy with the fastest potential growth rate at the moment and that it has built the world’s greatest digital economy and financial architecture.
Spence, who received the 2001 Nobel Prize in Economic Sciences, expressed his opinions on Monday during a conversation with teachers and students at Bennett University in Greater Noida.
Michael Spence discussed the current intricacies of our times with Abheek Barua, Chief Economist of HDFC Bank, during a session titled “Plan to Fix a Fractured World.” In the face of global crises, there is a common tendency to turn back the clock to well-known past norms, but Spence argued that we are actually speeding toward an unprecedented period.
“Of all of the other economies, India has the most potential for growth and is expanding at an exceptionally rapid rate right now,” the nobel laureate stated.
“At the moment, India is the major economy with the highest potential growth rate. India has effectively created the world’s greatest digital economy and financial architecture. The Nobel laureate said, “It is open, competitive, and delivers services of an inclusive kind to a vast array of territory,” as per a varsity statement.
Additionally, Spence noted that there is a “kind of regime change in the global economy” taking place.
Spence traced the development of the world economy following World War II and claimed that pandemics, geopolitical unrest, climate shocks, and other factors were “breaking down” the seventy-year-old global system.
He emphasized that the world system, which is based on economic standards like a global supply chain that prioritizes efficiency and comparative advantage, is rapidly changing and that “single sourcing doesn’t make sense in a shock-prone world.”
He continued, “There is a fundamental change in the global economy whereby supply chains are getting diversified and global governance is becoming more complicated than ever before due to the center of gravity shifting steadily towards the East.”
He claimed that despite the difficult times, optimism stems from the affirmative response to the query, “Are there countermeasures to improve human welfare?” He also discussed the tremendous advancements in science and technology, such as generative artificial intelligence, breakthroughs in the biomedical sciences, and significant energy shifts, that have the potential to improve human welfare.
He went on to voice his worries about the threat AI poses to jobs. Thinking about AI, I think that jobs will be threatened by GenAI. Therefore, rather than completely replacing humans, we need to reevaluate GenAI with an emphasis on greater human involvement. Although I am optimistic about its potential, its application ought to be in harmony with human intellect.
He gave two examples: first, the competitive pricing of solar energy; second, the cost of DNA sequencing has dropped from $10 million to $250. He did, however, note that there are drawbacks to this technological advancement and emphasized that both large and small businesses can utilize it.
He places a strong emphasis on consumer empowerment, advising them to identify and back businesses that make climate change a top priority in their overall business plan. This dual viewpoint on environmental responsibility and technology captures a larger picture of a future in which technological advancements are both inventive and supportive of social and environmental well-being.
The need for a comprehensive and careful approach is becoming more and more apparent as we navigate the changing terrain of technology and corporate responsibility, paving the way for a future where advancement is synonymous with moral responsibility.
Spence, who won recognition for his research on markets with asymmetric information, stated, “We now have incredibly powerful scientific and technological tools that, if we use them correctly, can be used to essentially deliver wellbeing and opportunity to a wide range of people.”
