Conference by Carlos Slim Helú: The Technological Big Bang

The technological Big Bang of the XXth century enlightens and transforms civilization not without great pangs that are product of costly socio-political and economic experiments; liberticides that led to war and misery. 

It arrives with new paradigms that are completely opposite to those of agricultural societies that had prevailed for 10,000 years, and where power was monolithic: political, religious and economic.

Technological development in the first half of the XXth century, mainly a byproduct of science of the XIXth, leads us, by means of the internal combustion motor and electricity, to transform countries of agricultural and rural societies into industrial and urban societies, and productivity is greatly increased.

Man communicates at the speed of light and travels at the speed of sound substituting for steam and horse. This change in civilization creates great wealth, especially in countries which are prompt in adopting these technological changes improving the welfare of its population, creating a very large middle class with access to numerous and different goods and services with a demand that feeds back into its economic and social development.

This is achieved in spite of the demographic explosion and the great wars that in a few years destroyed what took decades to build.

Countries that develop are mainly the Europeans, the United States, Canada and Japan. Those that take care of their internal economy developing their human and physical capital: health, education, infrastructure and housing. Others that had stood out in agricultural societies because of the richness of its natural resources, started to lag behind.

Technological development accelerates during World War II and the years after the war see a rapid advancement of science, its applications and of productivity, so that in the 50’s, in the United States, the greatest part of the economically active population is employed in services; it is a tertiary society that leads the transformation in which everyday it is easier to create wealth. Paradoxically, there is more poverty and backwardness, since there are many countries still living in rural, agricultural societies, still living on self-produced goods, lacking education and basic medical care. Nowadays, these constitute more than 50% of the population.

The paradigms of this new civilization: democracy, division of powers, liberty, physical and legal security, plurality, diversity, creativity, human rights, care of the environment, modern and quality higher education, are opposed to monolithic power, unitary thinking, the omnipotent state, totalitarian governments, dictatorship of the proletariat, unhealthiness, ignorance, social, political, territorial and economic immobility, and to unprepared physical labor.

Other factors that oppose each other are economic, financial, commercial and labor globalization, competition, productivity, labor mobility with autarchy, closed economies and those with permanent overprotection.

With a good historical perspective we can have a notion of the past and the present to have a clear vision of the future. With it we can lead our countries, swiftly and within a generation, to development and welfare of our people. The road has been shown to us by Spain, Portugal, Korea and other countries in Southeast Asia, and today it’s being done in Central Europe, Greece, China, India, Brazil and Mexico. 

This technological and digital civilization of information and knowledge that started in the 50’s, that Shriver writes about in the 60’s and that Toffler describes in the 70’s, makes  itself evident to many in the 90’s. Moore anticipates its exponential growth with the so-called Moore Law. Technology facilitates the entry of backward countries into the virtuous circle of development with work and access of the population to sustained and sustainable welfare with stability and healthy public finances, making this development process the best national and foreign investment. Backwardness is a great business challenge and opportunity: to modernize our agricultural sector, build our infrastructure, offer nourishment, health and housing to the population and quality higher education, all this generates better-paid jobs, buying power, strengthens the internal market and the ability to connect to the web.

Summarizing, what we need is development of human and physical capital.

Underdeveloped countries with a numerous young population of higher education age and qualified to work, have, in general, reduced population growth and are offering a demographic bonus for the following years. Not doing so causes migration, social conflicts and underdevelopment.

One of the fundamental virtues of the technological promise is that instead of seeking exploitation of Man, it’s sustained and developed by his welfare.

Even though there are no universal formulas to access development, there are common objectives, necessary macroeconomical conditions and similar tools.

Our countries need to adopt a digital culture that accelerates the process, and since telecommunications is the nervous system of this technological society, it’s important that people have access to it with the most advanced technology. Fortunately, economic interests coincide and lead to a greater penetration, lower prices and a better technology.

It is also necessary to have rural towns connected to the Web for purposes of education, health, information, entertainment, and to motivate hunger for knowledge. To this end, a mid-term financing of the connection including the computer, is necessary, especially for basic and higher education teachers, as part of their benefits.

Many companies around the world have made great investments, and optic fiber networks now abound, facilitating the spread of culture and digital inclusion.

Technology -which didn’t stop when the stock market bubble burst- is at last reaching the famous and awaited voice, data and video convergence, which -provided regulators do not hinder it- will popularize wide band, enriching contents and will generate great investment and competition that will in turn make all services available to the people at attractive conditions.

Technology is global, but services can be local or regional and will always require important investment given the rapid technology and market development.

Governments must promote development of all services and entrepreneurs that participate must understand that it is not a short term business, of quick profits, nor of low investment and work. It is a good business that requires much investment, a lot of competition, ever lower prices, great volumes and wide coverage.

I have no doubt that the so-called technological revolution of information is becoming more accessible every day to the backward countries, and instead of widening the gap with the developed countries, it is the bridge to access the welfare of our people.

This change in civilization is not an alternative, it is a reality that implies great transformations that are necessary to avoid costly crises.

The fast insertion into modern economy of current marginalized society will upset the basic goods market creating undesirable volatility that could be serious in some cases, like in the case of energy. Institutions and technologies that will anticipate these problems are necessary.

Our countries will be more global and more local, strengthening our identity, our culture, our economy and inserting us in globalization in accordance to our interests and circumstances, but without a doubt adopting and adapting us to this new civilization.

Carlos Slim Helú.
November 20, 2004.

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