India has developed the world’s most advanced digital economy and financial infrastructure, according to Nobel laureate economist A Michael Spence. During an interaction with students and faculty at Bennett University in Greater Noida on Monday, Spence praised India’s remarkable progress in the digital realm, calling it the “best” in the world.
“The major economy with the highest potential growth rate right now is India. India has successfully developed by far the best digital economy and finance architecture in the world. It is open, competitive, and delivers inclusive services to a vast array of territory,” Spence said, as quoted in a statement issued by the university.
Spence, who won the Nobel Prize in Economic Sciences in 2001 for his analysis of markets with asymmetric information, emphasized that India’s digital infrastructure is a key driver of its growth potential. This praise comes at a time when India’s digital transformation is being recognized globally for its efficiency, inclusiveness, and ability to provide financial services to even the most remote areas.
Global Economic Transition and India’s Role
Spence’s remarks also touched on broader global economic trends, noting that the world is currently undergoing a “regime change” in its economic system. The global order established after World War II, built on criteria like efficiency and comparative advantage, is now being disrupted by pandemics, geopolitical tensions, climate shocks, and other crises.
According to Spence, this 70-year-old global system is “breaking down” under the weight of these challenges. “In a shock-prone world, it doesn’t make sense to have single sourcing,” he said, referring to the need for diversifying global supply chains in light of the vulnerabilities exposed by recent events like the COVID-19 pandemic.
He pointed out that the centre of gravity in the global economy is shifting steadily towards the East, with countries like India playing a larger role in global governance and economic activity. As supply chains diversify and the global system becomes more complex, Spence suggested that India is well-positioned to capitalize on this transition.
Optimism in a Challenging Time
Despite the current challenges facing the global economy, Spence expressed optimism about the future, particularly in the areas of science and technology. He highlighted the significant progress being made in fields like artificial intelligence, biomedical life sciences, and renewable energy, all of which have the potential to significantly improve human welfare.
“What gives optimism is the affirmative answer to the question: whether we have counter-measures to enhance human welfare?” Spence said, pointing to technological innovations that could reshape economies and societies for the better.
For instance, he noted that the cost of DNA sequencing has dropped dramatically—from $10 million earlier to just $250 now—making groundbreaking medical advancements more accessible. He also mentioned the competitive pricing of solar energy, which has made renewable energy more viable and sustainable.
However, Spence also cautioned about the challenges that come with rapid technological progress. He stressed the need for equitable access to new technologies, ensuring that both large and small businesses can benefit from advancements in areas like artificial intelligence and renewable energy.
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“We now have incredibly powerful scientific and technological tools that, if we use correctly, can be used to essentially deliver wellbeing and opportunity to a wide range of people,” he said. Spence’s remarks underscored the importance of using these tools responsibly to ensure that technological growth contributes to the wellbeing of all sections of society.
India’s Digital Economy: A Global Model
India’s digital economy and financial infrastructure have been lauded globally for their efficiency and inclusiveness. Initiatives like the Unified Payments Interface (UPI) have revolutionized digital payments, making transactions faster and more accessible for millions of people across the country. Moreover, government-led programs such as Digital India have aimed to bring internet connectivity and digital services to rural areas, further enhancing the country’s digital footprint.
Spence’s comments come as India continues to make strides in financial inclusion, with digital platforms enabling access to banking, insurance, and other financial services for people in even the most remote regions. The success of these initiatives has positioned India as a leader in digital finance, and other countries are looking to replicate its model.
Nobel laureate A Michael Spence’s recognition of India’s digital and financial achievements highlights the country’s role as a global leader in technological and economic transformation. With the highest growth potential among major economies, India’s well-developed digital infrastructure and inclusive financial systems are driving its ascent on the global stage. As the world undergoes significant shifts, India’s digital economy is likely to play a crucial role in shaping the future of global economic governance.
