Uber and AirBnB are emblematic of the fact that many industrial factors of production are now accessible to you and me in smaller units of usage. That milk will either be delivered by drone or by a driver-less car. Or the Internet of Things where my fridge places an order for milk even before I realise that I have run out. It’s ‘cobots’ collaborating with each other, manning an entire factory. ![]() It’s not just “robots with artificial intelligence” that can develop skills previously only humans possessed. While we are in the midst of a technology revolution – characterised by extreme automation and extreme connectivity with rapid feedback loops – its implications reach way farther than the current reach of technology. The top four have greater market value than the top 12 banks worldwide. Today, the top six of the largest companies in the world are ‘platform companies’: Apple, Google (Alphabet), Microsoft, Amazon, Facebook and Alibaba. What does it mean at a macroeconomic level when a company with 55 employees can be acquired for 20 billion dollars? What does it mean for industrial relations when a privately-owned artificial intelligence product can learn all that there is to know about chess (and defeat the reining world champion) in just four hours? What does it mean for infrastructure investments and shopping malls when I do virtually all of my shopping using Amazon Prime? What does it mean for ‘manpower exports’ from South Asia when Dubai builds an entire office building using 3-D printing and appoints the world’s first Minister for Artificial Intelligence? What does it mean for inflation and productivity estimates when tools of communication are almost free at the point of usage? Not enough is being done to extrapolate from the world of micro to that of macro. Most macroeconomic aggregates such as growth, inflation, trade, capital expenditure, productivity and money supply are currently in a state of flux, the reasons for which are not completely understood. There is hardly any acknowledgement that both the levers of macroeconomic policy (interest rates, taxation, public spending) and the framework of debate (on a traditional left-right spectrum) are in rapid need of redesign. What is often overlooked are the macroeconomic and social policy implications at a structural level. Interventions are typically at the micro-level, service by service, business by business. Policymakers and businesses are rightly focused on harnessing digital technology for better delivery of public services or enhancement of their competitive advantage. The implications of the current wave of technological change at a mechanical and commercial level are fairly well-understood. ![]() “Yes, it is changing business models which is why we are fostering an ecosystem for start-up innovation”, said another minister. “ The fourth industrial revolution – isn’t that an IT thing? We have a Minister for Digital looking at it”, said a policymaker.
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