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Conflict is inherent in change: Toffler

Thursday morning, all roads in Mumbai led to a suburban hotel. India Inc (250 CEOs) was in full force to listen to the American futurology guru, Alvin Toffler, expound on the third wave, as it moves from the industrial age to the age of information technology.

"Many countries are still experiencing the first agrarian wave, but they are simultaneously going through the second industrialisation wave and the third new economy wave."

As the keynote speaker at Docu World, a Xerox-led event for brand awareness, Toffler, along with wife Heidi who has co-authored all his books beginning with Future Shock were the star attractions.

From the erstwhile chief of Tata Steel J J Irani to Satyam's B Ramalinga Raju to the Glaxo managing director V Thyagarajan, Apollo Hospitals' chairman Pratap Reddy and Godrej's Adi Godrej, they were all there.

In fact, on Wednesday, at an exclusive dinner at the Taj Mahal Hotel, where 40 of the 120 CEOs invited sheepishly posed with the Tofflers to capture the moment for posterity on camera. On his first visit to India, Toffler, who is believed to have been paid $50,000 by Xerox for the 60 minute talk, spoke to Nandini Lakshman.

Why do you say that economists are intellectually bankrupt in dealing with the knowledge economy?

This is not to insult individual economists. But the economic professionals understand the industrial economy, so they have a challenge basically. They have to reinvent economics just the way economics was invented in the 18th century.

Why do you say that the third wave is potentially dangerous?

When you have any kind of change, be it technological or social, it doesn't involve just one kind of change but thousands of changes that are interlinked with each other. As a consequence of that, when you have a rolling change like that, it produces conflict. Just like the industrial revolution changed the relationship with the state, the family structure, everything.

Conflict is inherent in change. That conflict is not always negative, but it can also be very dangerous. We believe that no theory on social change makes any sense unless it is accompanied by conflict.

But India has not completed its second wave. Its mass production ability is not fully exploited. So doesn't getting into the third wave before completing the second one promote inequalities?

India is not unique in this respect. The same thing is true for China, Brazil, Mexico and many more countries. There is scope for a second wave development and mass production.

When we talk of globalisation and its negative effects of homogeneity, we are really witnessing American second wave companies that are going around the world into regions that they didn't have access to before like the former Communist countries or in Asia where they get cheaper labour to set up mass manufacturing.

However, that's a diminishing wave, and in the long run India cannot advance just on the basis of the second wave alone. No matter how cheap its labour is, there's cheaper labour some place else.

You need to devote resources for developing infrastructure required for the third wave. Because to the degree you want to engage in the global economy and export, you have to continually move to higher value added products and you have to make use of the most advanced technologies in order to do that.

At the same time, you have to change the nature of agriculture. It has to be transformed and that can be done with the help of third wave technologies. We now know that you can do precision agriculture. You can also introduce a variety of other technological tools, but ultimately, I believe that agriculture is going to be the most advanced industry half a century later.

I think there's going to be a fantastic revolution in agriculture. In the meantime, you have generations of people close to starving. That's the paradox. So what do we do now? There is no quick fix. What we do know is that you can't do anything or can do only a little bit as long as there is no education. There must be an educated population. The better their healthcare, better is their economic productivity. This can be experimented by better communication. Then it takes the village out of its isolation.

The second idea is to legalise the ownership of the land that squatters are built on, then it becomes tradeable, something that people living there can bother fixing it. As you do this and turn it into a formal property, you create capital.

There is no way of stemming migration and in most cases it is public land. This is a global problem and there's no one magic bullet which solves the problem, but there are many things that can be done.

There has to be a combination of policies to introduce and build a third wave electronic infrastructure which can then help you do better in education and healthcare.

In the early 20th century, inventions like the airplane, telegraph and electricity revolutionised our lives. Why has the third wave not made such an impact?

The Internet has done much more. It is completely pervasive, it gives voice to people who never had voice, it's cheap, it changes the relationship between the producer and consumer, it gives the consumers power.

The IT that we are seeing now is primitive. But the real change will come when it is combined with biotechnology. When the convergence of IT and biotech is completed, many of our problems will be simplified.

Does the third wave work for all economies? In the west, capital is cheap and labour expensive. But it is the other way round in India. So shouldn't we have a labour intensive technology?

We in the US have been stuck with labour intensive technology, and we've been there first. We are now stuck with technology that has now been superseded.

Cheap labour is the opponent of technological advancement. And if the US expanded so rapidly, it was because our labour was too expensive compared to Europe. So when the industrial revolution came, the Europeans forced the peasants off the land and provided cheap labour and there was a labour surplus.

Since our labour hemorrhaged by going west, we had a shortage of labour so wages were high. So that meant that it was profitable to introduce technology as an alternative. And we also had immigration to solve that problem. That immediately gave us a demand and the Europeans then financed our capital investment infrastructure. If we had been isolated, this would not have happened.

I do believe that the fundamental, social changes that parallel the third wave can make it a much more humane system. But if you don't move in the direction of the third wave, you are condemning your country to perpetual poverty.

So doesn't the third wave benefit the West more than India? Like software is our plus point, but we have no patents or products.

Right now, yes. That's the argument we also had in Japan. People said that isn't it terrible that we are losing our manufacturing base. In the long run, we should not weep for the decline of mass scale production because we have done. It is ugly, boring and dehumanising. But we need it.

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