Whenever I visit an emerging market the following introduction is
made, always in a hushed tone: "Mr Haque, this is one of our leading
industrialists." It's a phrase that speaks volumes. In developed
countries, "leading" and "industrialist" are an oxymoron — because, of
course, their economies are supposed to be post-industrial.
But here's the funny thing. It's 2010, and we still don't know how to describe the archetypal magnates of the next economy. We don't have a word for it, so we resort to awkward neologisms, like "information entrepreneur" or "green mogul." It's as if we're still not quite sure just what kinds of "capital" tomorrow's tycoons will be "ists" of. What are the kernels of tomorrow's prosperity?
It's a vital question — because, as the eminent Jeff Sachs has recently argued, yesterday's conspicuous, debt-fuelled, binge-and-crash hyperconsumption shouldn't (and won't) be America's (or the world's) great engine of more sustainable, meaningful growth. Instead, investment must replace consumption. Like many today, Sachs concludes that the government should kickstart investment in clean-tech, high-speed rail, and a lot more besides. In other words, the economy's real capital gap — its critical shortage of productive assets — is in better, cleaner machinery: physical capital, next-generation infrastructure. While that's no doubt very necessary, I'm not convinced it will be enough. So what should we invest in?
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Author: Umair Haque
