Virendra Pandit
New Delhi: Emphasizing that the world is experiencing a “kind of regime change in the global economy,” Nobel Laureate economist A. Michael Spence has hailed India for building the planet’s best digital economy and financial architecture.
Noting that India is a major economy with the highest potential growth rate right now, he said the country has successfully developed by far the best digital economy and finance architecture in the world.
Professor Spence, who won the Nobel Prize with two others in Economic Sciences in 2001, shared his views during an interaction with students and faculty at Bennett University in Greater Noida on Monday, the media reported.
“The major economy with the highest potential growth rate right now is India. It has successfully developed by far the best digital economy and finance architecture in the world. It is open, competitive, and delivers services of an inclusive kind to a vast array of territory,” he explained.
Spence also pointed out that the world is experiencing a “kind of regime change in the global economy.”
Tracing the evolution of the global economy after the Second World War, he said the 70-year-old global system is “breaking down” due to pandemics, geopolitical tensions, and climate shocks, among other reasons.
Stressing that the global system—built on economic criteria like a global supply chain centered around efficiency and comparative advantage considerations—is undergoing a rapid transition, Spence pointed out that “in a shock-prone world, it doesn’t make sense to have single sourcing.”
With the center of gravity shifting steadily towards the East, 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, he added.
Despite the challenging time, he said what gives optimism is the affirmative answer to the question: whether we have counter-measures to enhance human welfare. He also outlined the enormous progress in science and technology that can contribute to enhancing human welfare, including generative AI, revolutions in biomedical life sciences, and massive energy transitions.
Spence cited the example of competitive pricing of solar energy and quoted the cost of DNA sequencing as having reduced from USD 10 million earlier to USD 250 now. However, he added there is a downside to this technological growth, and emphasized its availability to both big and small businesses alike.