The
entire economic history can be viewed along three big ideas that drove
profits, investment and as an aftermath politics and change. The first
big idea happened to be scientific thought. Someone started seeing the
world from a different angle and
people began to come out of dark ages. Lots of inventions were made and
consequently the industrial revolution took place and those who invested
in industrialization then, made lots of money. The idea was stretched a
little to optimizing the production process. Most of the
industrialized nations hunted for cheap labour and raw materials leading
to colonialism and imperialism. Powerful countries backed their
merchants and traders and tapped into the natural resources of Africa
and Asia to exploit them. The margins and the
huge potential for further exploitation made production a plump investment.
The second big idea was war. The entire world devoted itself to a
production frenzy, producing bombs, arms, ammunition, artillery,
aircraft bombers, tanks and what not. After producing them, they put
these goods to good use by destroying most of what was
built causing wide spread destruction and disease. When the war got
over, it’s time to rebuild from the scratch and the everyone devoted their time to nation building and arms development.
Technology got a fillip once again while green revolution
and white revolution emerged making agricultural production profitable.
The third big idea happened to be computers. During the post war
period, computers started appearing and they made rapid progress.
People started using computers in anything and everything. Communications and
connectivity improved, robotics took over manual
production and the world changed. Taking advantage of the IT revolution,
some nations emerged as top IT destinations outsourcing and
globalization happened and production started to be optimized at a new level, this time on a global scale.
Compared to the earlier phases, the current phase seems to be bland
and unproductive. We had no big ideas that changed lives or no tech
breakthroughs. All we were obsessed with was playing around with
financial instruments and returns on investment. Nothing
fundamentally changed to prompt a growth story. So how can we expect our investments to grow? The last 20 years witnessed a mad rush towards the
field of Finance, an auxiliary field that is supposed to support the
real functions like manufacturing or agriculture.
The best of the minds were diverted to these fields by lure of money and
exuberant lifestyle. Physicist who are supposed to design space probes
started playing with option pricing models. The cream of the academic
community took to MBA and science as a field
was left to lesser mortals and an entire generation got wasted without
producing a great idea.
What is going to happen now? Do you want to pick a winner?
Comments
There is also revolution in material sciences helping to renewable energy industry achieve new milestones - we are now looking at fossil fuel free world by 2030 rather than 2050. Billions are being pulled out of poverty. Life expectency at birth is increasing day by day medical science advancements.