WHICH APPLE WILL WE PREFER THE MAN MADE ONE OR THE NATURAL ONE

 

Which Apple will we prefer, the man made one or the natural one

-         By Abhishek Maity

 

Physiocrats were an 18^th century group of French economists who believed that agriculture was the source of all wealth whereas the manufacturing and service industries did not produce any surplus.

Physiocracy was a theory of wealth which was the first to grasp the general principles behind the workings of economic phenomenon, the founder of this group Francois Quesnay believed in free trade and minimal intervention of the government in the markets to ensure that entrepreneurial spirits of the farmers or agricultural workers are not taxed away which in turn could stymie the growth of the economy.

But come the 21^st century the theory of physiocracy seems redundant as clearly the companies like Google, Microsoft, Apple and many other firms whose valuation runs into billions are not producing agriculture related products such firms are simply engaged in providing services or manufacturing. The more interesting fact is the emergence of the new age tech start-ups which create value by offering services through the application interface program. As of December 2021, there were 800 such start-ups each with a valuation above $1 billion and 35 start-ups with a valuation above $10 billion all around the world in various fields such as ed-tech, fintech, health-tech, software-internet firms, e-commerce and hardware. Such companies currently are valued more than the traditional companies selling simplified and physical products. Like when Zomato an India online food delivery platform raised money through IPO, its valuation as per economic times report was rupees 98,732 crore which was more than that of some major Indian companies like Coal India and Tata motors. Then the acquisition of an offline education Centre like Aakash Educational Services by Biju's an ed-tech platform for around $1 billion dollars in a cash and stock deal implies that value or wealth can be created by companies who are exploiting the niche products or are satisfying the customer needs in a better than the other companies. In the year 2021 India saw the creation of 44 unicorns most which belonged to the tech start-up category and as per a report shared by ministry of commerce the number of people employed in Indian start-ups were around 1.74 lakh in December 2021. According to DPIIT 50,000 start-ups were registered under Startup India initiative launched in 2016 to aid their development by providing a wide range of benefits.

But does this imply that agriculture as a sector is adding less of surplus to the overall economic growth of India. The agricultural sector contributes 16% to India GDP creating a per capita growth of 108 dollars whereas in United Kingdom the share of the sector is 0.6% of their GDP with a per capita of 91 dollars despite this India is a developing country but one of the fastest in the world.

The theory of dual economy developed by Julius Herman Boeke can be applied to India to understand the coexistence of the traditional and modern economic sectors. This theory focuses on the existence of two separate economic sectors within one country divided by different levels of development, technology and different patterns of demand. This theory is evident from the fact that many tech start-ups have emerged in the agriculture and allied activities sector in India.

Agri star is such a company which on the basis of data analysis provides personalized services to the farmers to close the knowledge gap about prices of seeds, reaching the desired markets to sell produce or delivery of Agri inputs to the doorstep at affordable prices, the company operates in five states and caters to around 5 million farmers. Another startup Bijak started in 2019 is a B2B market place that connects buyers, sellers, farmers, retailers, wholesalers and food processors through a real time trading platform that enables a fiction less transaction the app also provides for in-built storing of invoices, rating systems for sellers, payment reminders its basically like digitization of physical mandis.

 

Such an amalgamation of real economy and the internet economy will create amazing growth opportunities for the Indian farmers and the companies providing these tech solutions. Recognizing the facts the Indian government in its recent budget allocated rupees 60 crore towards digital agriculture along with a creation of a specialized fund with blended capital to finance agricultural startups and rural enterprises focusing on value generation for farm related products and to help the farmers in maximizing the realized value from selling their produce in the market.

Hence, it can’t be said that the ideology of physiocrats is completely misplaced but rather the agriculture sector and the internet economy can complement each other in development and promoting growth for a country as diverse as India in terms of cultures, growth opportunities and given the number of innovations in technology all over the world.