India as Stuff Superpower

Atanu Dey clears some misconceptions on India as the IT Superpower:

You have to have production before you can use technology to increase the efficiency of production. IT is an efficiency enhancing technology. You have to have something going there before you can obtain gains from IT use.

All this talk of India becoming an IT Superpower is a lot of nonsense because India cannot become an IT superpower without it first becoming a Stuff Superpower. India has to produce stuff that you can lay your hands on — does not matter what it is. It could be food, or it could be manufactured stuff or whatever. But it has to be stuff. The reason is that we exist on stuff — we eat stuff, we wear stuff, we get transported on stuff. We are made of stuff. We cannot exist on ‘knowledge’. We are not dream stuff even though dreams are made on us.

We are poor not because of lack of knowledge — there is tons of it in every conceivable place in the world. You can get all the knowledge of the world in a neat little package in a tiny 100 GB harddrive. It would do little to alter the fact that most of us don’t have enough to eat.

Let’s get back to basics. What is poverty? Poverty is lack of income. What is income? Income is that share of stuff produced that you get to take home for yourself. Let’s not confuse money with income. Income is often denominated in monetary units but in real terms, income is what you get to keep from what is produced overall. Per capita income is therefore a ratio: a ratio of what is produced (the numerator) to the total number of people (the denominator). You can increase income by either producing more or by reducing the number of people. If the rate of growth of production is lower than the rate of growth of the population, you will have a falling per capita income. In time, you would have deepening of poverty.

To repeat that point: we are poor because the amount of stuff we produce is low relative to the number of people we have to distribute the stuff to. IT can help increase the amount of stuff produced but IT can never be a substitute for stuff.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.