October 13, 2015

Technologists and Economists Have to Come Together

by Digitalization, Point-of-View

Originally published in OpusCapita Journal.

Sweden’s former prime minister, Anders Borg has a message – one that is both perceptive and inspired, as we have come to expect. He already has the keen ear of the World Bank and other household names in the international economic arena. Let’s hear him out!

Anders Borg paints a picture of a brave new world full of possibilities.

“Globalization will not slow down but will instead accelerate from today’s level, and global affluence will consequently reach new heights. The leading stars among the future world’s economies are more likely to be countries such as China, Brazil and Nigeria rather than the USA, Finland or Germany.”

Something big is going on

Borg is convinced that digitalization is just in its infancy. He is future-oriented and is widely respected in the financial world. This means his predictions are listened to. With reference to telecom giant Kinnevik, which is among his clients, he gives an unusual yet revealing example of the technological advances and automation in the service sector.

“In Tanzania, we (Kinnevik) have a day loan service that is fully automated. If you apply for an SMS loan via your mobile phone, you are automatically refused if your call is made late in the evening or from a bar. This is without any human interaction!”

He laughs when he gives the example. Automatically denied day loan applications made from bars are perhaps only small fry when compared with the giant steps taken lately in e-trade automation and financial management, but this example nevertheless illustrates clearly that something bigger is going on.

Deflation must be avoided

But the former finance minister is also concerned about the current economic situation, with the presence of deflation and low interest rates, not least in Europe.

“We must get inflation started,” he repeats over and over again. “If deflation takes hold, we know from history that it can cause severe damage in society. Therefore low interest rates will probably persist for a long time to come.”

Science fiction becomes a business reality

A more stimulating challenge for Borg is how to marry the two different worlds of technologists and economists. Progress in digital technologies moves forward so much faster these days and we have seen so many recent examples of science fiction becoming a business reality.

“When you talk to people on the technology side, everything is possible. When you mention this to economists and politicians they hardly know what you are talking about. And if they do, they lack the resources to bring this stuff into their models! We have now invited both sides to the World Economic Forum to meet and discuss directly at the same table. It will be a clash worth seeing!” he says bursting into laughter and clapping his hands together – maybe illustrating the sound that the first global meeting between entrepreneurial technologists and the more conventionally minded economists will create.

Or maybe he just wants to signal that our time is up. He is on his way to a television interview, where they are eagerly waiting to discuss Anders Borg’s brave new world of consultancy and free thinking.

Anders Borg thrilled his audience at the OpusCapita seminar in Stockholm in April 2015.

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