Digital technology raises optimism in world: Michael Spence

Noted economist and Nobel laureate Michael Spence on Tuesday said the digital technology developed in the last 25 years has changed the world in countless ways.

He also said the use of digital technology has raised optimism in the world as economies and parts of societies are in the process of being built on a digital foundation, which will result in more equitable wealth distribution.

"Digital technology, which has developed in the last 25 years has brought a lot of change which was not imagined before. The use of digital technology has raised optimism in the world as economies and parts of societies are in the process of being built on a digital foundation, which will result in more equitable wealth distribution," Spence said.

He was speaking at a symposium at the Indian Institute of Management- Ahmedabad (IIM-A).

Speaking on Mahatma Gandhi's "trusteeship principle", at a time when India is celebrating his 150th birth anniversary year, Spence said that trusteeship used to be part of the concept of public service.

"However, these days most politicians, with some exceptions, don't think of themselves as trustees so doesn't leaders in business," he said.

Gandhi had introduced the trusteeship principle for rich people, asking them to be trustees of their wealth and use it for the upliftment of the poor.

"Every day we use the concept of trusteeship in finance. Trustees are people or organisations that manage and oversee the management of assets for the benefit of a specified individual or a group of people," Spence said.

Embedded in this concept is expertise which takes some skill to do this properly, and not everyone can be expected to have the skills, he said.

"By and large this trusteeship system has worked pretty well when applied. But, its application has been narrower than it should be, and certainly...than Gandhi envisioned in a more expansive social version of it," the US-based economist said.

"Recently, there was a huge financial crisis but not a single major institution moved in the direction of accepting some part of the collective responsibility for the crisis or for preserving the stability and integrity of the system," he said referring to the recent financial meltdown in the West.

Moreover, things like the recent rise of emerging economies and digital technology have made me more hopeful when income disparity is rising, Spence said.

"Emerging economies have distributed wealth between countries, and even domestically the wealth is being distributed among the have-nots," he added.