"The loss of jobs is a key factor causing economic insecurity in the West."
"The most basic physiological needs"
Economist Soumitra Dutta does not see the West's tendency to be skeptical of economic progress as a threat to innovation there.
Soumitra Dutta (56) is a Professor of Management at Cornell University. Born in India, Dutta is co-editor and author of the Global Innovation Index (in collaboration with the World Intellectual Property Organization and INSEAD), co-chair of the Global Future Council on Innovation Ecosystems of the WEF (through the end of 2019) and a member of the Davos Circle.
Interview Oliver Adler, Chief Economist at Credit Suisse Switzerland
Soumitra Dutta, of the three areas covered in this study, survey respondents most want to accelerate progress in the economy. Why is that?
One can refer to the hierarchy of human needs as stated by American psychologist Abraham Maslow, which starts at the basic physiological needs of food and safety and moves on to the higher level needs of love, esteem and self-actualization. A good economy caters to the basic physiological needs.
People in almost all of the countries surveyed want to speed up progress in e-mobility. Why?
There is a greater focus on sustainability across the world, and I see the trend towards alternate sources of energy as part of this global shift. Electric vehicles and other similar digitally powered devices are certainly one part of the shift towards alternate sources of energy. Also, I would interpret e-mobility as representative of the trend of rapid progress in digital technologies. All sectors are being transformed by digital technologies, and people see both tremendous opportunity and challenges in the ongoing process of digital transformation. People also realize that the future economic development of their nations – and by extension their own well-being – is directly linked to the successful adoption of digital technologies.
Where people want to decelerate economic progress, their main concern is outsourcing, especially in developed countries.
The rise of emerging markets, especially some key countries such as China, is causing these concerns. People are worried about jobs being offshored to these markets, as for example has happened with manufacturing jobs that have migrated to many emerging markets from European and North American nations. The loss of jobs is a key factor causing economic insecurity in the West.
The countries with the highest desire for economic progress are Brazil, China and South Africa. No European or North American country is among the top seven. Do you see a danger that these countries will be left behind in terms of innovation?
I do not see an immediate risk of these countries being left behind as they have very strong institutions, successful universities and tremendous pools of talent within their boundaries. They also have a strong ability to attract global talent and capital. It will take a very long time for citizens of emerging markets, including China, to catch up to the economic living standards of the West.
If you personally could either stop or accelerate a particular economic trend, what would it be?
I would certainly accelerate the adoption of digital technologies and e-mobility in line with the survey results. Digital transformation is happening all around us and those companies and nations that will lead in the digital transformation will succeed in the new digitized world. This transformation could also promote sustainability.