Economics A Viable Option in the Present Era Of Disruption
By Prof. Indradeep Ghosh, Associate Professor & Dean (Faculty), Meghnad Desai Academy of Economics (MDAE)
Joseph Schumpeter, an economist who wrote extensively on the disruptive nature of technological innovation during the first half of the 20th century, coined the term ‘creative destruction.’ The term alludes to the substantial disruption technological innovation can cause to a given economic scenario, such as the massive impact industrialization had on the situation of employment in Europe. Cut to 2018, and the advent of new technologies such as Artificial Intelligence, Big Data, Machine Learning, Internet-of-Things etc. has put the spotlight on the term yet again.
Current work skills are becoming obsolete
The current onslaught of cutting-edge technology and its far-reaching impact on the essential fabric of humanity has necessitated the need for an urgent rethinking of how we, as global citizens, should orient to the world around us.The professional world of today, both youngsters and experienced employees, are facing a business ecosphere where their current work skills are becoming obsolete at the speed of thought. What kind of training and upskilling do they require to stay ahead of the curve? Where should they start?
Before we attempt to answer these questions, we need to appreciate that even though the disruptive forces are technological, and unprecedented in nature, they are going to fundamentally impact human transactional behavior i.e. their effects will be economic in nature. It is the everyday business of trucking, bartering and trading, that is most critically affected by these forces. Indeed, these forces of disruption are transforming those very activities that constitute everyday economic life.Consequently, the likely effects of any kind of disruption are probably most transparent to those who understand the economic sphere, viz. economists.
An open system interacting with other systems
However the conventional understanding of economics does not provide enough scope to understand the present economic scenario. Most of the economic curriculum used by academic institutions today understand economic reality to be largely static and bound by conventional laws. However, nothing can be further from the truth when it comes to the dynamic, chaotic, ever-changing world of current economics-it is a living, breathing, shape-shifting reality replete with contingency and novelty, an open system interacting with other systems (sociological, political, cultural, to name a few), whose understanding requires both analytical and critical thinking skills, and a multi-disciplinary approach.
Today, survival, sustenance and success in the economy is dependent on how nimble, adaptable and well-equipped a professional is in the skills that guide the economy of tomorrow. This includes not only an in-depth understanding of the principles and implication of state-of-the-art technologies such as AI, Machine learning, Blockchainetc. but also knowledge of the exact nature of their impact.
Problem-solving then assumes a role that requires rigorous practice through simulation based on practical examples. At MDAE, for instance, we do promise such an economics training, one that helps the student dialog between theory and practice, so that neither is privileged over the other, and thereby a dynamic understanding of the forces at work shaping economic reality, can be arrived at. To create the capacity to stay ahead of uncertainty, economic training of such a nature is precisely what is needed.
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