Vikas Shah, Thought Economics, December 2010
Industrialisation changed everything. It took a largely agricultural society, with limited communication and mobility, and transformed it profoundly. Huge advances in energy, communications, engineering and transportation and diffused innovations in healthcare and education saw the world's population rise six-fold in under two centuries, with income per capita rising ten-fold. As Nobel Prize winning economist Robert Lucas describes in his 2002 book, Lectures on economic growth, "For the first time in history, the living standards of the masses of ordinary people began to undergo sustained growth. ... Nothing remotely like this economic behaviour has happened before."
This growth came at a price. In England, the City of Manchester was at the heart of the global revolution in textiles manufacturing. All around the city huge edifices to wealth and success were built; from civic and cultural institutions, to great houses, mills, railways, roads and more. In the shadows of this growth, the life of the average mill-worker (and hence, the average citizen) was rather different. Friedrich Engels, in his book, The Conditions of the Working Class in England in 1844, explores this environment, "...Right and left a multitude of covered passages lead from the main street into numerous courts, and he who turns in thither gets into a filth and disgusting grime, the equal of which is not to be found - especially in the courts which lead down to the Irk, and which contain unqualifiedly the most horrible dwellings which I have yet beheld. In one of these courts there stands directly at the entrance, at the end of the covered passage, a privy without a door, so dirty that the inhabitants can pass into and out of the court only by passing through foul pools of stagnant urine and excrement. In dry weather, a long string of the most disgusting, blackish-green, slime pools are left standing on this bank, from the depths of which bubbles of miasmatic gas constantly arise and give forth a stench unendurable even on the bridge forty or fifty feet above the surface of the stream. Everywhere half or wholly ruined buildings, some of them actually uninhabited, which means a great deal here; rarely a wooden or stone floor to be seen in the houses, almost uniformly broken, ill-fitting windows and doors, and a state of filth! Everywhere heaps of debris, refuse, and offal; standing pools for gutters, and a stench which alone would make it impossible for a human being in any degree civilised to live in such a district." On the origins of this environment he continues, "Everything which here arouses horror and indignation is of recent origin, belongs to the industrial epoch." It takes little imagination to draw comparison from Engel's description of Industrial Manchester to the modern day slums of South America, India and elsewhere in the 'developing' world. As globalisation led the revolution further, the "West" per-say became the mill-owner, and the "Rest of the World" became the mill-worker. As Robert Lucas describes, "...Since the onset of the industrial revolution the most rapid growth has often occurred in areas where growth had been most rapid in the past, creating gaps between living standards in the richest and poorest economies that are now in the order of 25 to 1." A view confirmed by a famous Russian proverb which states, "The rich cannot eat money, so it's just as well that there are poor folk to grow their food."
In the past quarter-century, telecommunications and information-technology have brought further profound changes to our world affecting almost every aspect of our lives. These technologies have also, for the first time, allowed developing economies to join the conversation- taking them rapidly from being regarded as 'poor' nations- to being powerhouses of commerce and democracy.
India is regarded as one of the most powerful case-studies for the economic, social and political changes technology and innovation can bring, and in this exclusive interview, we talk to Dr. Sam Pitroda, adviser to the Prime Minister of India on Public Information Infrastructure and Innovation with the Rank of Cabinet Minister. Dr. Pitroda takes us on a very personal journey on India's technology driven revolution looking at areas ranging from the impact of the phone, through to the sweeping changes in economics, social-structure and even national security.
Dr. Sam Pitroda is an internationally respected development thinker, telecom inventor and entrepreneur who has spent 44 years in Information and Communications Technology and related human and national developments. Credited with having laid the foundation for and ushered India’s technology and telecommunications revolution in the 1980s, Dr. Pitroda has been a leading campaigner to help bridge the global digital divide. During his tenure as Advisor to Prime Minister Rajiv Gandhi in the 1980s Dr. Pitroda headed six technology missions related to telecommunications, water, literacy, immunization Dairy and oil seeds. He was also the founder and first chairman of India’s Telecom Commission. Dr. Pitroda was Chairman of India’s National Knowledge Commission (2005-2009), an advisory body to the Prime Minister of India. He holds close to 100 worldwide patents and has published and lectured widely in the US, Europe, Latin America and Asia.
Firstly, looking at the India case-study.
Q: Can you explain the impact that telecommunications has had on India's development?
[Dr. Sam Pitroda] Let me start by giving you some background. When I entered the telecom scene in India, in the early nineteen eighties, we had two million telephones for seven hundred and fifty million people. It used to take fifteen years to get a telephone connection. In a very short space of time, just twenty five years, we have seven hundred and fifty million telephones. We are adding ten million every month, month after month, and for the first time in the history of India- we are a connected nation of over a billion people. In the process, we had to build our own local and rural telecom infrastructure. We first used STD/PCO's to increase access- then we digitised the network and built software locally- and also created human capacity. Telecommunications has not only connected India, but it has also given India global recognition and a new respect for Indian talent. It has created our own multinationals, and created a huge amount of foreign exchange reserves. On the other hand, because of connectivity, India has increased mobility. People from Orissa work in Gujarat, people from Gujarat can start businesses elsewhere. Because of telecommunications, a farmer can now get information on seeds and fertilisers. A vegetable merchant can call and find out where the best market is to sell his produce- and so our productivity has gone up. It is now easy to get railway tickets, you can call and find out if trains are late or buses are late, you don't have to wait in line. So all these little, but important things have changed in India- thus increasing convenience and comfort for people. I can give you many examples of this. About ten years, a guy told me about his father's death. He had to send twenty seven people on different buses and trains to inform relatives all over the country because phones didn't work. When his mother died, there were STD/PCO facilities in most-all villages. He had to only make twenty seven calls, and they were all informed in under half an hour of the news. So there are all kinds of examples people give about the use of telephone, the convenience, the flexibility and so forth. Telecommunications has connected India- and has brought about openness, accessibility, connectivity, networking, democratisation, decentralisation and as a result- social transformation.
Mobile communication, at this stage, is all about voice communication. The next phase will be broadband. Broadband is just about to start in India. I have said time and time again that the first phase of the telecom revolution is about to end- which is voice communication. The second phase of the revolution is about to begin- which is broadband. We are trying to create various platforms- broadband, UID, application, security, GIS and even payments. As we create these open platforms, we will create open government with transparency and accountability. It will have far reaching implications on governance, on public delivery of services, on education, health-delivery systems. And you will create a new developmental paradigm. That's the challenge for the next decade.
Q: How do technology and innovation impact developmental economics?
[Dr. Sam Pitroda] Today, information technology is pervasive. It is no longer a vertical, it is a horizontal. Information and communication technology has an impact on everything from education, to government, to health, industry, transportation and.. well.. you name it! Now, when you look at the internet and web- you realise it has changed the business model completely. When you think of the Internet and web today, you have to think of the processes. Almost all of the processes we use today were designed in the twentieth century, with the old mindset of command and control. Forms and data such as immigration, customs, starting a company, land records, birth certificates, death certificates, police reports, court cases- all these processes, designed in the twentieth century, are now obsolete. You have to redesign your processes to meet the needs of the twenty first century, and the web. The key question we are asking is, how do you restructure all these processes for the twenty first century. How do you get a birth certificate today? you have to fill in many forms right? Now though, we don't really need to do that. Where innovation comes in- technology provides an entry point. If you don't innovate, technology will not give you the results. You can't have the same processes, you can't have the same set of rules and regulations. You have to redesign processes to use this powerful technology to really improve productivity and efficiency. For that, you have to innovate. Innovation is not about products or scientific laboratories- it is also about governance, education and everything we do as people. It is not about scientists alone innovating.
Technology comes everywhere, in agriculture and many sectors. Technology is no longer a separate segment- it is pervasive. It is technology IN agriculture, IN governance, IN education, IN health. It is also about health technologies, education technologies and agricultural technologies- there are two sides to it. Technology can exist in a sector, and be generated by or for that sector.
Looking at governments- in India, we are certainly taking this seriously. For example, the fact that the Prime Minister of India elevates an innovation advisor to the level of Cabinet Minister is sending a signal to the country that there is political will behind innovation-that we mean business, and we are sincere about innovation in government and everywhere else.
Outside India, people are becoming more and more aware of the role of technology but still, the minds of leaders in many parts of the world are focussed on command and control. A lot of these technologies go hand in hand with democracy. We want to democratise information.
Democracy & Human Rights:
Q: How do technology & innovation impact democracy, governance and human-rights in developing economies?
[Dr. Sam Pitroda] Technology opens up the system. Look at what happened with Wikileaks? this is a classic example of a system getting opened up directly, indirectly, covertly or however. You cannot have the same rules in governance now that you had in the past. The twentieth century governance model has gone. Command and control, defence oriented mindsets? those models don't work anymore in the twenty first century. The twenty first century leadership model has to take openness, accessibility, honesty, sincerity, transparency as core values. If you don't have those? you will be caught anyway. This requires people to think differently, and I don't think a lot of world leaders have understood this yet. You cannot rule anymore, the way people used to rule- just twenty or thirty years ago. You have to carry people with you, you have to develop a democratic framework on issues, create debate and really change the way you do things.
Looking at India- there are huge changes. We are just at the first phase of taking technology to the people, democratising information. That phase is just beginning. Watch and see what happens over the next twenty five years, and you will see a phenomenal difference in Indian democracy.
The earlier model of governance was command and control. This simply won't work anymore. I think there is an important issue about national boundaries too. This is a technology which has no boundaries, so the notion of physical boundaries is very different today. What is a nation? What does nationality mean? We need to begin to ask those questions. Ultimately there will be a global movement of a large number of people- this is already happening to an extent- and borders will have a different meaning. The only things which are really of great concern are violence, terrorism, and security. If, somehow, we can manage these great concerns- then I think we will have a much better open world.
If we turn to companies, such as Google. I don't look at these as political powers. It's not a big deal, they are opening information- but information is open anyway. For government servants, for example, it means they have to be transparent and honest. They cannot manipulate anymore, and they will have to realise that their public and personal standards will have to be the same- they cannot have a hypocritical approach to their conduct- they can't say one thing and mean something else.
From my background, I look at a Gandhian approach. The world has no option but to be open, honest, sincere. I can't tell you one thing and mean something else, because somewhere in the web, you will catch me saying the opposite, and that becomes news. So I have to be very clear about what I say, what I do, and what I mean If I am a public figure, for example, I cannot afford to say something in confidence and the opposite in public- that's what Wikileaks is fundamentally all about.
Governments used to control the flow of information and ideas across their borders. That has now changed. A local event becomes international news very quickly. A little event in Chicago, for example, all of a sudden becomes an international event. The point is that because of the web, the world is connected. The world is open. Physical borders have no meaning. I could be in the USA and work in India, I could be in India and be concerned about Hungary. People of equal interest come together all over the world. The environment is an issue, so people from all corners of the world come together on environmental issues. This was simply not possible earlier.
Social Empowerment & Civil-Development:
Q: What role does technology play in social empowerment?
[Dr. Sam Pitroda] Everything is about to change.
The way we bank, for example, is about to change. Banking was always based on people who save. There are millions of people in the world who are un-bankable. Banks assume physical infrastructure- great buildings, offices and so forth. You don't need all that rubbish anymore! Banking, governance, health- all these areas are about to change. I can, for example, see all my health data on my cellular phone. People have not really understood that the web and mobility- it has far reaching implications on everything we do.
I find, unfortunately, that everyone is still locked into a twentieth century mindset. Economists still measure GNP, GDP, Salaries, Employment and all these things. Politicians are still thinking of control, power, command. Military machines still think of controlling borders. Education, for example, gives us a great sense of this. It is understood that it takes about four years to get a degree. Who decided that it should take four years to get a degree? what is the role of a teacher? I can go on the web and learn everything there is to learn! I don't need a teacher. I need someone to talk to! I don't need a guy to come into class and deliver a lecture- The teachers, who were there to develop and deliver content- are no longer needed. I need a mentor not a teacher. So the role of teaching will change. What is the concept of a new-university? What will the university of 2050 look like? It certainly won't look like Harvard or Cambridge or any of these classic institutions Everything will change fundamentally- but people are not willing to change. They still want to preserve the old university structure where you pay forty thousand dollars a year in tuition fees. This doesn't make sense to me! Why would I want to pay forty thousand dollars a year to learn something? I have the internet! Fifty thousand dollars a year to get an MBA? for what!? What are they teaching? They are also teaching the wrong stuff. They are teaching people how to be rich, how to control persons. The future is not about this. What do MBA's teach? how to extract value- not create value.
Let's look at this. There are three fundamental technologies which I believe will change the world, and are doing so already to some extent without people realising- as many people still want to hold on to the past.
The first is the web, internet, information, communication and mobility. That is one set of technologies which are having far reaching implications on education, health, government, processes- everything.
The second set of technologies are biotech, nanotech, stem-cell research, drug discovery and all of those areas- which will cause life-spans to increase. I guarantee that in the next twenty years, the average life-span will be over 120- they're not going to let you die. If you have money- they'll fix you. I always give my own example. I had two quadruple bypasses, I had cancer. If I had been born only twenty years earlier, I would have died a long time ago. Just because the technology was available to fix me- I continue- and I live a very comfortable and healthy life at sixty eight- in spite of the two quadruple bypasses, cancer, four stents- life is as good as you can imagine. So technology is going to improve longevity, the health of those lives, nutrition- and all of those areas.
The third set of technologies are really about energy. We can't go on producing it using oil, or coal- and we can't rely on geothermal and hydro-electric sources. We have to find new technologies for power. If we can, somehow, crack solar power, which we have not done so yet with its expense and cumbersomeness. But some combination of biotech, nanotech, solar or whatever it may be- will bring us distributed power. So every home, every factory will have their own battery- power will be distributed.
These three areas will create a new world- everything else is irrelevant. Everything will change completely- and this is where the democratisation of information becomes critical. My goal in life now is to really focus on the democratisation of information.
Q: What are the key social and national challenges brought by technology to developing economies and their neighbours?
[Dr. Sam Pitroda] I am not a philosopher or an economist. But as a lay-men I observe that all of those who are rebelling are, essentially, have-nots in some form. They feel they have not been part of the system, and feel deprived, or taken-advantage of. Whether this is nationalists, terrorists, or even many of the cross-border conflicts in the middle east. If we open up the system, and allow them to participate in the mainstream- over a period of time I believe that terrorism will go away- as then everyone will have the same opportunity. Today they are reacting because they do not have the same opportunities. It may take a century for this to happen though. Even when we look at conflict- this is true. Cyber-warfare is a real worry and at the moment governments are not taking enough notice of this. They do not spend the same amount of money on cyber-war as conventional military hardware. This will be a real threat for a while, for maybe fifty years- until they realise we are all part of a new open economy- and this may create a different view of things.
In this world, you cannot be disconnected and expect to be part of the global economy. You have to be connected. Connectivity is critical to globalisation, economic development, prosperity and growth.
In his 1959 book, "Social Change in the Industrial Revolution: An Application of Theory to the British Cotton Industry" Neil Smelser discusses how, "When comparing a society with its past or with another society, we often employ a dichotomy such as "advanced vs. backward," "developed vs. underdeveloped," "civilised vs. uncivilised," or "complex vs. simple". Sometimes these words yield too little information, because they claim simply that one society is superior to another. Sometimes they yield too much, for terms like "advanced" shroud a galaxy of vague connotations. Hence to use such words may generate conflicts of pride and conflicts of meaning, both of which subvert intelligent discourse. The dichotomies are, however, not completely useless. Common to all are the dimensions of complexity and differentiation. In other words, an "advanced" or "developed" society possesses a complex organisation of differentiated social and cultural components. To illustrate, a religion becomes a religious tradition only after it shakes off its undifferentiated tribal elements and develops a complex, independent organisation. A military machine is more developed than spontaneous warfare because it operates under specific, explicit, and sometimes autonomous rules. Bureaucratic administration is more advanced than a household staff not only because it is more complex but also because it is less mingled with personal loyalties. A highly developed economy has a complexity of organisation and a differentiation of units which do not characterise underdeveloped forms. Political behaviour "advances" when it is carried on within political institutions free from nepotism, tribal loyalties and bald economic interests. In short, one element in "growth" "advancement," and "civilisation" is that the social structures in question become more differentiated from each other."
The Indian case-study has provided clear evidence of the power of technology and innovation to develop a nation. Whereas previously many would have referred to India as a 'third world' economy, it is difficult now to see it as anything other than an economic powerhouse- and potentially one of the greatest areas of commercial and social opportunity in the world.
We are now, though, at a pivotal point in the journey. Technology has brought a huge change in how we as human beings exist and relate to each other, our economies and our nations. As Dr. Pitroda says above, the very notion of borders and nationality is being challenged- and technology is bringing democracy and economic opportunity to billions who have previously been excluded from the conversation. Clearly, we are also at a tipping point as the world struggles to cope with an inappropriately shaped economy, constantly exacerbating global conflicts, huge social changes, and a lack of sustainable resource to feed, power, and provide for an ever growing population.
In a 2008 book entitled "Natural Capitalism: The Next Industrial Revolution" Hawken et. al set the scene, "Imagine for a moment a world where cities have become peaceful and serene because cars and buses are whisper quiet, vehicles exhaust only water vapour, and parks and greenways have replaced unneeded urban freeways. OPEC has ceased to function because the price of oil has fallen to below five dollars a barrel, but there are few buyers for it because cheaper and better ways now exist to get the services people once turned to oil to provide. Living standards for all people have dramatically improved, particularly for the poor and those in developing countries. Involuntary unemployment no longer exists, and income taxes have largely been eliminated. Houses, even low-income housing units, can pay part of their mortgage costs by the energy they produce; there are few if any active landfills; worldwide forest cover is increasing; dams are being dismantled; atmospheric CO2 levels are decreasing for the first time in two hundred years; and effluent water leaving factories is cleaner than the water coming into them. Industrialised countries have reduced resource use by 80 percent while improving the quality of life. Among these technological changes, there are important social changes. The frayed social nets of Western countries have been repaired. With the explosion of family-wage jobs, welfare demand has fallen. A progressive and active union movement has taken the lead to work with business, environmentalists, and government to create "just transitions" for workers as society phases out coal, nuclear energy, and oil. In communities and towns, churches, corporations, and labour groups promote a new living-wage social contract as the least expensive way to ensure the growth and preservation of valuable social capital." They continue by echoing the words of Dr. Pitroda, "... Is this the vision of Utopia? In fact, the changes described here could come about in the decades to come as the result of economic and technological trends already in place."
If we wish for our civilisation to continue we must heed the advice of Sicilian writer Giuseppe Lampedusa who once wrote "If we want things to stay the same, things will have to change." Technology has provided us the tools for this change, and within our grasp, within our own lifetimes, is the possibility to create the utopian vision which Hawken et. al describe (above). The challenge comes from the required change in our incumbent thinking- the way we, as a society, relate to wealth, nationality, governance, communications and identity will have to change so profoundly- that our children will simply not recognise the world we live in today, as we do not recognise the feudal societies of the past.
The alternative, if we do not embrace these changes is the real possibility that our civilisation may not survive- as we run out of energy, food and capital- creating profound conflicts and eventually destroying the fabric of our very society.
As German philosopher Theodor Adorno commented, "....Human progress can be summed up as the advance from the spear to the guided missile, showing that though we have grown cleverer, we have certainly not grown wiser." and if we wish to avoid our future generations making such a chasting critique of ours, we must embrace the lessons from great thinkers such as Goethe who said, "Life belongs to the living, and he who lives must be prepared for changes."
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