Why technology matters for sustainable development

In his book Zero to One , Silicon Valley entrepreneur Peter Thiel
addresses the distinction between globalization and technology.
Globalization constitutes “horizontal progress”, he writes, or
“taking things that work somewhere and making them work
everywhere”; and China is the “paradigmatic example” of growth
through globalization.
Technology, on the other hand, enables “vertical progress”,
which Thiel argues is harder to imagine because it means “doing
something nobody has ever done”. Moreover, while technology
has for many come to mean information technology, there’s no
reason to restrict its definition in this way, since “any new and
better way of doing things” can be called technology.
Since the 2008 financial crisis, there has been an explosion of
entrepreneurship around the world. Asian countries, particularly
India and China, have demonstrated their ability to create high-
growth start-ups. Around the world, there are 70 or so private
enterprises valued at above $1 billion , and Asia is home to 15 of
them.
But most of these ventures are products of horizontal progress
(going “from one to n”, to use Thiel’s expression) and not
vertical progress (“from zero to one”). Strictly speaking, even
internet giants such as China’s Alibaba Group and India’s
Flipkart are not technology pioneers: their well-earned success
has been in deploying and scaling a proven business model in
their home market.
So far, China, India and other emerging markets have grown by
adopting and adapting technologies and business models from
advanced economies. But can economic growth be sustained
and delivered through the globalization model alone? Large
populations in Asia and Africa aspire to join the ranks of the
middle class; bringing sustainability to so many people will take
innovation across a wide range of industries, which have so far
remained relatively untouched by the rapid pace of change
affecting information and communications technologies.
There is an enormous amount of latent consumer demand
across the developing world that will be difficult to meet without
innovation. Consider the challenges in energy, healthcare and
financial services, for example. Energy and power requirements
are so enormous that meeting them with fossil fuel-based
technologies would result in serious environmental degradation,
as China’s experience is proving.
In healthcare, large sections of the poor are being priced out of
the market for life-saving drugs, and the industry requires a
more cost-effective drug development model, as well as new
government welfare mechanisms to deliver medicines to the
bottom of the pyramid without violating the intellectual property
rights of drug innovators.
In finance, tens of millions of people remain without bank
accounts and are cut off from the formal financial system.
Rapidly evolving crypto-currency technologies such as the
Bitcoin (combined with internet-enabled smartphones) can help
widen financial access.
The scale of need across these and other industries is such that
the globalization approach alone is not sufficient: new
technology is urgently required. Entrepreneurs have to deliver
innovations in multiple sectors, not just ICT-related industries, to
be able to make a large-scale impact.
Finally, it is more difficult for entrepreneurs and investors in
advanced economies to deliver such innovations because they
are not close to the customer. Increasingly, entrepreneurs in
emerging markets will need to take the initiative and attempt to
do what nobody has done, because the problems in these
markets will be problems that nobody has really solved before.
Additionally, these will be problems that advanced economies
don’t really have a stake in solving.
In other words, emerging-market entrepreneurs will need to think
of how to go “from zero to one” in myriad industries if they are
to deliver sustainable and equitable growth for their large
domestic populations. It poses a serious risk for global
economic growth, but also presents the entrepreneurial
opportunity of the century. Innovators who square the circle will
not only create substantial wealth; they will also have done a
tremendous service to human society by helping millions
transition out of poverty.