Creative education, health play a big role in future economies: Basu

Even as the global economy faces changes led by the digital revolution looking to enter the next phase, renowned economist Kaushik Basu believes creative education and healthcare sectors will play a big role for countries to emerge as winners in the future will.

Speaking at the Gujarat Institute of Development Research (GIDR) 8th Pravin Visaria Public Memorial Lecture, Basu stated that focusing on creative education and the health sector will be key for countries like India to emerge as winners in the future.

“As we move into the next phase, it will be a challenge for different countries. There will be new winners and new losers. You take any country, including India, some people will say it’s a sure winner and others will say it’s a sure winner is a sure loser. The truth, as always, lies somewhere in between. If you analyze carefully, India is doing well in some ways and badly in other ways… I believe there are two sectors that are going to dominate in the world and countries that are taking positions there are going to be the big players. These are creative education and healthcare sectors,” said Basu, former Chief Economic Advisor to the Indian government and Carl Marks Professor of International Studies at Cornell University.

“Creative Education because outreach work is undertaken so those you foster creative education will be front and center. Healthcare sector because a large part of GDP will be healthcare and the scope for growth is huge. These two sectors are going to play a big role,” Basu continued in his presentation entitled “The Changing Nature of the Global Economy and Labor Markets: What May the Future Hold”.

Citing the latest data from the World Bank, Basu explained that while India was the fastest growing country in terms of GDP growth in 2021 at 8.7 percent, India grew at a rate of 0.8 in both 2020-21 Percent neither high nor low was cent. “We are at a point where we need to think about the future creative process,” Basu said of the lessons India could learn from historical examples like Argentina and the US to invest in education.

Citing Argentina’s examples, Basu explained that the South American country was touted as the richest country in the 1920s, but declined in the 1930s due to “hypernationalism” and US investments in education that helped them overtake Argentina began to fall.

Similarly, in the current era, South Korea’s success due to investment in education is also evident. “Investments in creative education in South Korea are among the best in the world. In 2019, the number of patents per million people in South Korea was 3319, leading the world, followed by Japan with 1943 patents per million people. School teachers in South Korea earn like rock stars… In terms of per capita ratio, South Korea will overtake Japan, which would have been unthinkable 20 to 30 years ago,” Basu further explained in his argument on investing in creative education and health.

The renowned economist claimed that India has the potential to attract students from all over the world and become a global center of education, although research could play an important role for the country.

Meanwhile, Basu spoke about the decline in workers’ income share of GDP in countries like Australia, the EU, Canada, Japan and the US, and called for a way to think about workers’ income share being maintained even if their jobs are replaced by machines .

Describing globalization as a “natural process” like gravity, Basu opposed talks of “de-globalization,” while stating that the digital revolution is now connecting workers and consumers in different regions, something that India could stand to benefit from.

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