Time to brush up on your science fiction
Towards the end of the tumultuous decade that started in 2008, it is clear that everyone, including economists, needs to accept that the future is upon us
Paul Krugman would stand in line to meet Charlie Stross. The Nobel Prize-winning economist who spoke at the Hindustan Times Leadership Summit last week is a sci-fi buff and, with the conviction of a true zealot looking for an argument (I’ve been there, so trust me), told me that the British writer is the best science fiction writer alive. This was at a pre-summit dinner and the small group that had gathered around Krugman—managers of private equity funds, CEOs of global and local companies—didn’t really seem to care. Later that evening, we briefly discussed the economics and probability of commercial space travel of the kind that could enable the colonization of Mars.
That we were having a serious discussion on what was once a popular theme in sci-fi (Mars books are legion) is a sign of the times. Towards the end of the tumultuous decade that started in 2008, and characterized by flat-lining incomes, the rise of authoritarian leaders selling simple (and usually shallow, but very popular) ideas, and general unhappiness and strife, it is clear that everyone, including economists, needs to accept that the future is upon us. Indeed, in recent years we have seen a profusion of literature trying to understand what would happen if the homo economicus (or the economic and rational human) is replaced by machina economicus (an interpretative translation would be the perfectly rational machine).
For the benefit of those who have been away on Mars, let’s make a list. In the ongoing decade since 2008, artificial intelligence (AI) has finally stopped being a buzzword and become reality thanks to what is called deep learning (simply put, teaching a machine to think and learn); self-driving cars have been launched; advances in gene-editing have put the 100-year life (borrowed from the title of a book on what longevity means to life and work by Andrew Scott and Lynda Gratton) within our grasp, and AR and VR (augmented and virtual reality) are disrupting everything from pornography to education (although, sometimes, pornography is educative). I’ve left out the more ordinary innovations including homes that think, phones that talk back, robots that greet you at stores, transparent yet secure ledgers of everything (as some have described blockchain) or household 3D printers.
Pause for a moment and think. And then, if you want to, trivialize. I am told there are no queues in Mars.
I’d like to call this an ex machina moment for businesses. Start-ups and incumbents that understand the power and utility of these technologies will be able to write the new rules of business and define not just industry standards but industries themselves. For instance, AI could take away 60-80% of service sector jobs. That voice at the other end of the line when you call your bank (if you are one of those who still calls banks) could soon belong to an intelligent agent. How soon? Yesterday.
Where would we find such companies? Actually, all around us, and even in India (and I use the word even not as an expression of disparagement but with a sense of pride because one would typically expect to find such companies in the US, Japan, or the country with the most digital society in the world, South Korea). Within a 25km radius of the Hindustan Times newsroom in central Delhi is a start-up that makes industrial robots. There are a few dozen companies in the country working in the area of AI, including a handful that would be recognized as true AI companies anywhere in the world. Mint has been profiling some of these companies as part of its Mint40 series, an ongoing listing that also covers popular companies that do not use cutting-edge technologies but which could dominate the country’s business landscape in the 2020s. As the name suggests, the listing will have 40 companies—40 companies that could well constitute an index of the future.
In the 1990s, pharma firms such as Dr Reddy’s Laboratories and IT companies such as Infosys were among the bright lights in this landscape (although both companies were founded earlier). In the 2000s, it was telcos such as Bharti Airtel Ltd. And in the 2010s, this role \was taken up by the e-commerce marketplaces. Capital and the best human resources gravitated towards them. They received glowing (and sometimes gushing) media coverage. And they were valued disproportionately.
This doesn’t mean today’s large companies will simply roll over and die. The smarter ones among these—one example is industrial conglomerate General Electric—are already reinventing themselves, using their existing and obvious advantages to innovate, define standards, even acquire hot start-ups. But, at the risk of repetition, disproportionate value will be created by start-ups in these new areas.
That’s why smart venture capitalists, analysts, journalists and job-seekers would do well to brush up on their science fiction.
R. Sukumar is editor, Mint.