Financial Daily from THE HINDU group of publications
Friday, Jan 25, 2002
Financial Daily from THE HINDU group of publications Friday, Jan 25, 2002 |
|
|
|
|
|
Industry & Economy
-
Economy `Poor nations must ride crest of Third Wave' Our Bureau
Mr Alvin Toffler
MUMBAI, Jan. 24 THE Toffler wave hit Indian shores on Thursday, with the famed Mr Alvin Toffler speculating on the impact of the Third Wave on developing countries. Off the city's seacoast in Bandra, some thousand listeners, packed tight, looked up to Mr Toffler as if to some Grecian oracle. But the oracle had nothing much to say about India. Known for his books Future Shock, Powershift and the Third Wave, Mr Toffler said the challenge facing developing nations such as India and China today was how fast the Third Wave sector (knowledge-based economy) would grow and how the creation of this new civilisation would affect existing social and family structures. "The world is on the edge of the next phase of social and economic transformation. You see this revolution in the drive towards globalisation and its backlash, the breakthroughs in genetics, redistribution of global power, the role of the media. The changes will not only be driven by technology but also by political, economic and social aspects," he said at Docuworld India 2002, an international event showcasing the latest in digital document solutions, organised by Xerox. The creation of a revolutionary new economy will make many companies obsolete while simultaneously opening broader opportunities for others. There is potential for a gigantic leap forward in wealth creation but also great conflict. Conflict and turbulence are inevitable with change, he said while emphasising that conflict can be creative, mitigated or violent. "We still have economic thinking based on Second Wave assumptions and therefore, are unable to map what's happening. Many economists have not caught up with the new realities. We need a new set of economic concepts that go beyond what the Second Wave saw," Mr Toffler said. Expressing dissent over some economists harbouring extreme views based on `Second Wave assumptions' and thereby doubting whether there will be the birth of a new economy, Mr Toffler said: "In the US the collapse of the dotcom market and recession has led a section of economists to doubt if there is a new economy, and that the same economic fundamentals are operational. Another school of thought believes that a definite change is coming about and will lead to 25-30 years of absolute prosperity." Mr Toffler is of the contention that while the revolution is definitely taking place, it will not necessarily mean a straight-lined uninterrupted prosperity. It will have its ups and downs. On the changing role of technology in the new economy, he said, "More technology does not mean massification. New technology will lead to demassification, i.e. businesses will move from mass production to customised production. As we move up in the economy we move away from the mass market to the micro market. "This will also eventually lead to demassification of the family structure as evidenced in the different family formats visible in the US. It is in sync with the changes in technology, industry and production," he said. Going forward, businessmen and companies will need to look beyond their immediate competition and into the constellation of businesses they are in. These will include non-business entities such as political factors, social factors, NGOs, etc, that will impact their bottomlines, according to Mr Toffler. The dominant division of power in the world is the Second Wave on top and the First Wave at the bottom. But this model is now coming apart, with the Third Wave on top signifying knowledge-based economies, the Second Wave of industrialisation and the Third Wave signifying Agrarian economies, he said.
THE First Wave of change signifies the agricultural revolution 10,000 years ago, which led to the transition from hunting, gathering and foraging to the great peasant societies of the past. The Second Wave of Change is triggered by the industrial revolution about 300 years ago and gave rise to a new factory-centered civilisation. The Third Wave is more than just technology and economics as it also spells the transition to the use of knowledge and mental power from muscle power in the economy.
Send this article to Friends by E-Mail
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|