RECESSED ECONOMY: ROLE OF SCIENTIFIC INNOVATIONS- TOLULOPE ADETORO

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Recession in economics according to Wikipedia is a business cycle contraction which results in a general slowdown in economic activity. Macroeconomic indicators, such as GDP(gross  domestic product), investment spending,capacity utilization,household income,business profits,and inflation fall,while bankruptcies and unemployment rate rise. Recession generally occur when there is a widespread drop in spending(an adverse demand shock) This may be triggered by various events,such as a financial crisis, an external trade shock,an adverse supply shock or the bursting of an economic bubble. A recession is a significant decline in activity across the economy, lasting longer than a few months. It is visible in real gross domestic product,real income, industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product, although the National Bureau of Economic Research (NBER)  does not necessarily need to see this occur to call a recession.

Recession is a normal, however unpleasant, part of the business cycle; but, one-time crisis events can often trigger the onset of a recession. The global recession of 2007-2009 brought a great amount of attention to the risky investment strategies used by large financial institution, along with the global nature of the financial system. As a result of the wide-spread global recession, the economies of virtually all the world’s developed and developing nations suffered significant setbacks. Numerous government policies were implemented to help prevent a similar future financial crisis as a result. Typically, a recession lasts from six to eighteen months, and interest rates usually fall during these months to stimulate the economy.

An economy does not go into recession in a day, it is a gradual process.Most times,recession sets into an economy by;
(i)High inflation, a general rise in price of goods and services leading to purchase power,
(ii)Accumulation of debt servicing especially foreign debts,
(iii)High interest rates-this discourages investors,
(iv)Fall in aggregate demand, fall in wages and income, and
(v)Mass unemployment and general loss of confidence on the government due to economic indices.

The government usually responds to recession by adopting expansionary macroeconomic policies,such as increasing money supply,increasing government spending and decreasing taxation. In an attempt to overcome recession, science and technology must be prioritized to flex economic muscles. Innovation and entrepreneurship are crucial for long-term economic development. Over the years, America’s well-being has been furthered by science and technology. Fears set off by the Soviet Union’s 1957 launch of its Sputnik satellite initiated a wave of U.S. investment in science, engineering, aerospace, and technology. Both public and private sector investment created jobs, built industries, fueled innovation, and propelled the U.S. to leadership in a number of different fields. Nigeria has invested little in science, technology and innovation over the past three decades. The country’s gross expenditure for research and development as a percentage of GDP is 0.2%,less than half of the world average of 0.4%. Small Africans countries have done far better than Nigeria-Mozambique spends 0.5%, Mauritius spends 0.4%, Uganda spends 0.45 and Botswana spends 0.5%.

Researchers has found a link between technology innovation and national economic prosperity. For example, a study of 120 nations between 1980 and 2006 undertaking by Christine Qiang estimated that each 10% point increase in broad band penetration adds 1.3% to a high income country’s GDP and 1.21% for low to middle income nations. In addition, Taylor Reynolds has analyzed the role of communication infrastructure investment in economic recoveries among OECD countries and found that nearly all view technology development as crucial to their economic stimulus packages. He demonstrates that there is a strong connection between telecommunication investment and economic growth, especially following recessions. These kinds of investments help countries create jobs and lay the groundwork for long-term economic development. As a result, many nations around the world are investing in digital infrastructure as a way to jump-start economies weakened by the recent financial collapse. The decline in stock market valuations, rise in unemployment, and reduction in overall economic growth has highlighted the need to target financial resources and develop national priorities. In conditions of economic scarcity, countries no longer have the luxury of being passive and reactive. Instead, they must be proactive and forward-looking, and think clearly about how to create the basis for sustainable economic recoveries. Not surprisingly, given its long-term potential, a number of countries have identified information technology as a crucial infrastructure need for national development. Broadband is viewed in many places as a way to stimulate economic development, social connections, and civic engagement. National leaders understand that cross-cutting technology speeds innovation in areas such as health care, education, communications, and social networking. When combined with organizational changes, digital technology can generate powerful new efficiencies and economies of scale.

Science and technology plays lots of important roles in overcoming recession, there is therefore a need for a clear focus on innovation. In moving forward, it is clear that information technology enables innovation in a variety of policy areas.  According to Philip Bond, the president of TechAmerica, “each tech job supports three jobs in other sectors of the economy.” And in information technology, he says, there are five jobs for each IT position. Some of these innovations will I like to discourse;

Faster broadband and wireless speeds enable people to take advantage of new digital tools such as GIS mapping, telemedicine, virtual reality, online games, supercomputing, video on demand, and video conferencing.  New developments in health information technology and mobile health, such as emailing X-rays and other medical tests, require high-speed broadband. And distance learning, civic engagement, and smart energy grids require sufficient bandwidth. High-speed broadband allows physicians to share digital images with colleagues in other geographic areas.  Schools are able to extend distance learning to under-served populations. Smart electric grids produce greater efficiency in monitoring energy consumption and contribute to more environment-friendly policies.  Video conferencing facilities save government and businesses large amounts of money on their travel budgets. New digital platforms across a variety of policy domains spur utilization and innovation, and bring additional people, businesses, and services into the digital revolution.In the education area, better technology infrastructure enables personalized learning and real-time assessment. Imagine schools where students master vital skills and critical thinking in a personalized and collaborative manner, teachers assess pupils in real-time, and social media and digital libraries connect learners to a wide range of informational resources. Teachers take on the role of coaches, students learn at their own pace, technology tracks student progress, and schools are judged based on the outcomes they produce. Rather than be limited to six hours a day for half the year, this kind of education moves toward 24/7 engagement and learning full time. Universities’ knowledge should be commercialised, universities represent a crucial linchpin in efforts to build an innovation economy.  They are extraordinary knowledge generators, but must do a better job of transferring technology and commercializing knowledge.

University licensing offices must speed up their review process in order to encourage the formation of businesses. Universities should think more seriously about innovation metrics so they allocate resources efficiently and create the proper incentives.Right now, many places count the number of patents and licensing agreements without much attention to the businesses created, products that are marketed, or revenue that is generated. They should make sure their resources and incentives are aligned with metrics that encourage technology transfer and commercialization.

An Einstein Strategy for Immigration Reform is needed. One of the most important challenges is a new narrative defining immigration as a brain gain that improves economic competitiveness and national innovation. A focus on brains and competitiveness would help an economy overcome past deficiencies in immigration policy and enable the country to move forward into the 21st century. It is a way to become more strategic about promoting long-term economy and achieving important national objectives. We need to think about immigration policy along the lines of an “Einstein Principle.” In this perspective, national leaders would elevate brains, talent, and special skills to a higher plane in order to attract more individuals with the potential to enhance innovation and competitiveness. The goal is to boost the national economy, and bring individuals to the country with the potential to make significant contributions.  This would increase the odds for prosperity down the road.

These represent just a few of the examples of how scientific innovation booms recessed economy. Technology fosters innovation, creates jobs, and boost long-term economic prosperity. By improving communication and creating opportunities for data-sharing and collaboration, information technology represents an infrastructure issue as important as bridges, highways, dams, and buildings. Without science and technology,an economy is as good as dead.

 TOLULOPE RHODA ADETORO

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