Spence, who is a professor and dean emeritus at Stanford University, said at the summit on Saturday that Western economies are unlikely to gain more from the transition to generative AI than developing nations.
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“We are entering a period of experimentation and exploration targeted at solving problems, and they won’t be the same across boundaries. So, we (West) have a productivity problem, like labour shortages. That’s probably not what’s going on in India,” Spence said.
While the global economy is facing constraints, India is well-placed in other aspects as well, according to him.
“We do have serious supply-side constraints. They are probably not as evident or important here in India, which is growing at a high rate and has the highest potential growth of any major economy in the world,” he said.
Spence further said there was at least a recognition of problems like climate change, which was non-existent a decade and a half ago.
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“Fifteen years ago, when I was chairing a commission on growth and development and working with people worldwide, including here in India, awareness about the nature of the challenge and what we all had to do to solve it was very low. And that’s not true anymore,” Spencer said.He said recognition is important in addressing challenges like climate change, adding that AI is still an unknown field.
On climate change, he also said there is a dire need for a measurement mechanism for companies trying to address such issues.
“There are companies who are aggressively pursuing business strategies and
plans that are well-aligned with really important economic and social goals, including climate change — unfortunately, it’s not everybody. There’s another set of companies that view ESG (environmental, social and governance) as a marketing challenge, and that’s a problem we face,” Spence said, highlighting concerns around greenwashing.
He said solutions like an offset market could prove to be useful in this regard. On the global economy, he said it is not possible to solve all the problems.
“We are not returning to a world with enormous growth in the emerging economies in a world whose global economy was constructed essentially on efficiency and comparative advantage criteria and nothing more,” Spence said.
He said countries need to learn to navigate the complicated environment where there is an overlay of national security into the economic policy and avoid a complete fracturing of the global economy.