Thareendra Kalpage on technological progress, new inventions, and the competition between the US and China
Thareendra Kalpage is a well-accomplished corporate business leader, seed investor, and astute observer of the world economy and political situation. Mr. Kalpage, based in Colombo, Sri Lanka, is involved in several business, intellectual, and cultural endeavors. He is a staunch advocate for free enterprise, free market, and private enterprise economies.
Q: “Back to the Future” movies promised us a flying car by 2020. There are only four months left till the end of 2022. We don’t have flying cars and aren’t getting any closer to having them. Is humankind’s technological advancement slowing? How do you think we can break out of this rut?
A: I feel there is a slowing, and the rate at which we progress is most likely insufficient to push our civilization to the next level. Also, we need to understand that for any giant leap to take place; there is a need for a powerful incentive to achieve it. Most of the technological progress made in the 20th century can be attributed to the world wars or the cold war. Now that we have had no such conflict since the 90s, one can say that’s why.
In the same time, the thing is, there has been momentous progress in information technology domain. We may not have flying cars, but we have made incredible progress in hardware, software, the Internet, and mobile. But here is the problem; this is not the case in subatomic particles, hypersonic flight, interplanetary travel, alternative energy sources, cutting-edge medical treatments and gadgets, etc. Basically the foundations of physics have not progressed for 40 years.
Q: What did cause it?
A: For me. It’s the regulators, and I have no intention of criticizing their work as their work is already challenging. I am just throwing out some ideas to get regulators thinking about how they may conduct things differently without slowing the momentum of human innovation and the rate of progress
Consider the approval cycles for cryptocurrency and biotech for operational levels. Compared to the expense of launching a new product in the information technology industry, obtaining operational approval for a Crypto and Biotech can cost anywhere from a million to several million dollars. There must be a method to maintain all essential protocols at a far lesser cost. Otherwise, attempts at innovation are limited to a few large corporations that can afford it, limiting growth.
Because of its track record of success and low entry hurdles, the information technology sector has seen a lot of innovation, unlike other industries, which have had the reverse effect.
Q: You hear about crypto currency in finance, AI in ICT and Biotech in medical sciences. Could you make a prediction and rate breakthrough in a particular area that will get us out of the stagnation?
A: I will not pretend to be an expert on actual money, let alone cryptocurrency, and I am indeed not an expert on AI or Biotech.
But here’s the thing: sometimes things are plain common sense. Serving people who are dissatisfied with the world today will be the backbone of the next generation of big businesses. In this regard, I believe the crypto and biotech industries will undoubtedly offer outstanding growth opportunities, so their rate of progress will be naturally higher. I’ve recently come to believe that A.I is little overrated; however, this could be because I haven’t seen enough of that world because I don’t have access to what’s going on in privately funded labs related to A.I research. Anyway, I must admit that I was bit frightened of the prospects of AI two or three years ago, but not anymore.
Someone constructing an AI that becomes sentient would be a breakthrough in AI that would outweigh the contributions of the other two. Yes, I considered current speculations of Google’s LaMDA becoming a self-aware being. I trust Google and their explanation of LaMDA, therefore I don’t believe we’ve reached that point yet.
Q: Who is contributing more to the advancement of human civilization, America or China? Who would put an end to this so-called slowness in the rate of growth of human civilization?
A: Whatever is said and done about the United States, they were the global hub for invention. They contributed the most to the progress we accomplished as a species in the last century. I feel the time has come for this country base development conversation to cease. It is now more borderless and dependent on people than at any other moment in human history. It is no longer about state-funded research but about private-sector-funded research.
A shift has occurred for the state, and it now matters greatly whether people want to end this great stagnation or not. If you seek work-life balance in a way such as three-day work weeks, and if you encourage everyone else to think along the same lines, the great stagnation will never end, regardless matter whether you are in America or China.
By the way, During the last 150 years, I do not think China has done anything even remotely close to what the United States has done for the technological growth of the human race. I do not think China still has the machine or structure to overtake the United States and keep their position as number one.
Q: In what ways do you mean that they (China) are already an economic superpower and is now more influential in global trade than the US?
A: Here’s my take: China has indeed surpassed the United States as the primary engine of global economic growth. Since the 2008 financial crisis, one-third of all GDP growth has occurred in just one country: China. China has established itself as the most critical link in the world’s essential global supply chains. True, but the Dollar remains the world’s largest reserve currency, accounting for 60% of foreign exchange reserves. While Beijing’s ambitions and progress deserve careful consideration, the United States maintains a significant lead in several key areas. The Dollar remains the preferred currency for cross-border transactions, and the United States equity markets remain the world’s largest. Also, the United States maintains a significant lead in venture capital investments.
Furthermore, the United States remains unsurpassed as the society that attracts the world’s most gifted inventors and entrepreneurs and provides them with the freedom and opportunity to realize their ambitions.
I firmly believe that Chinese President Xi Jinping is the most successful dictator the world has seen. He has been able to centralize power more tightly and with the use of technology than any previous centralizing authority in the history of humanity. But despite all that control, they are not doing a great job at managing their challengers for a long-term fix; it’s a fact that the Chinese population is ageing, and the economy is not growing as fast as they want. The country has one of the most uneven sex ratios in the world because of its one-child policy. Currently, there are 116 males born for every 100 girls, which is significantly more than the global average of 107 boys per 100 girls. The freedom movements in Twain and Hong Kong have put Beijing on the defensive. With those, I feel China will be about survival rather than growth in the next few years. It is not impossible to reach number one only by having a survival mindset; difficult but not impossible.
Being number one would be easy. Being number one while keeping a machine like the United States, which is completely powered by the Private Sector Growth mindset and innovation engine, at number two would need China to constantly be their best version. But, in my perspective, with all of the coming internal challenges, China’s state-powered engine simply lacks the drive to be that.
Q: You appear to be a fan of the United States and her system. Do they require any repairs, or do their wheels function perfectly? Pick one issue that worries you about the United States, similar to what you said about China.
A: Many experts, I believe, would say different things depending on their area of expertise. Energy experts may remark that the energy sector requires more attention. In contrast, health experts may suggest something about that area in their domain.
But, as an outsider seeing and supporting a private-sector-led American system of capitalism, student debt is the first thing that comes to mind. I believe it is already up to 1.6 trillion dollars. Suppose you are a young student in the United States. In that case, the likelihood that you will begin your life in debt is high, making it much more difficult to accumulate capital and, naturally, making you less friendly to capitalism. So, the US suddenly have a generation of young people that are hostile to capitalism and have voting rights. That is a significant issue; I do not believe the costs should be socialized. However, the US must find a solution, such as taking substantial steps to assure that federal student loan borrowers have access to bankruptcy relief.
Q: Is there something that the governments or the public can do to speed up the rate of technological advancement?
A: Well, Governments absolutely can. To begin, governments should direct their regulatory authorities to ease up on the restrictions placed on private sector businesses and their innovation attempts. If not, consumer expectations become low, and investors hesitate to invest money into new technologies and startups. Innovators are less likely to take calculated risks that could lead to significant advancements. This is the first and foremost step to rediscovering a sense of purpose and potential.
Q: You placed a lot of prominence over biotech, you actually put it even above A.I earlier. So, someone who reads this decides to invest his retirement funds in biotech. Do you recommend biotech as a good retirement investment?
A: Is biotechnology going to be the next big thing? Yes, it is, in my opinion. Given its broad scope, the industry is expected to grow at a relatively high compounded annual rate, with demand expected to rise. Not everyone should put their money into biotech.
High failure rates in the biotech industry mean investors need to spread their money among at least five companies. Then, even if one of them runs out, you won’t be entirely out of luck. Biotechs aren’t a good bet for retirees who can’t stand seeing even one of their stocks sink to zero. Similarly, biotech may not be the most significant area to seek for retirement portfolio growth if the job of balancing your portfolio and investing in several different biotechs appears burdensome to you.
Q: Just one piece of advice for the youth of today?
A: I’d choose an Asian audit and advise against investing money in a house or a car. Invest your capital in a business and then build your lifestyle from your profits. Do not lose your capital over something that will not make money for you. It’s not just you that will hold the progress of an entire country.
