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February 19th, 2009
Colin Clark and Jean Fouristie proposed an economic theory which divides the economy into three sectors of activity: extraction of raw materials (primary), manufacturing (secondary) and services (tertiary). According to the theory, the main focus of an economy's activity shifts from the primary, through the secondary and finally to the tertiary sector as shown in the chart below.
During this evolution low-skilled, low-income population faces the loss of opportunities in labor market and restricted social-cultural integration.
The recently adopted economic stimulus package of Obama administration derives its ideological footing from Keynesian school of thought. According to classical Keynesian thinking, the state should stimulate economic growth and improve stability in the private sector — through, for example, adjusting interest rates and taxation and funding public projects emphasizing the role of countercyclical fiscal policies.
To look for clues for the final destinations of these public investments, it is worthwhile to take a closer look at the relative contribution of various sectors to US economy. As is apparent from the chart below, US economy has overemphasized the role of tertiary sector at the cost of primary. I argue that in order to maintain a balanced economy, primary sector needs to grow more rapidly. More specifically, I expect more activity in energy generation and raw materials production. An interesting point here would be the geographical proximity of a disproportionately large knowledge based economy fueling growth in primary and secondary activity. In my view this would be an interesting phenomenon and emerging futuristic technology will have to play a major role in this transition. High valued added extraction and production processes will make sure that US economy maintains its leadership position while having a more balanced portfolio.
In this context, I would place medium to long term bets on companies having demonstrated technologies for production and synthesis of nanomaterials for applications in energy value chain (generation, storage, distribution and conversion). Nanomaterials for healthcare applications is another application which would generate and attract a lot of interest in near term.
For Indian nanotechnoprenuers, it means an opportunity to conduct research in these areas and export the technology. This is going to be a paradigm shift, from being a technology importer to being a technology exporter. It would be interesting to see if there are any Indian companies who are able to successfully exploit this ground-breaking opportunity.
Please send your feedback, ideas, and suggestions to Vivek Srivastava at .
Vivek hold a Ph. D. in materials science and has published over a dozen papers in international journals and contributed to international conferences and seminars. He has interests in commercialization of nanotechnology & new ventures with innovative business models to exploit the advantages India offers. He consults existing businesses to grow and expand in new technology areas, and serves as mentor to budding entrepreneurs. His current research interest are "severe plastic deformation methods for production of bulk nanomaterials" and "Role of industry dynamics on making R&D funding decisions".