As innovation takes deep roots, the knowledge-based century is set to throw open a bundle of opportunities, said French Nobel laureate Jean Tirole. What is required to excel are scientific insight and economic sense, he added.

A recipient of Nobel memorial prize in Economic Sciences in the year 2014, Prof. Tirole is from the Toulouse School of Economics, Universite Toulouse Capitole (France). He delivered a talk on ‘Business, innovation and society in the digital age’ at the 104th Indian Science Congress here on Wednesday, where he explained the opportunities thrown up by the digital economy.

As promoting innovation became the buzzword, having its echoes in India as well, Prof. Tirole saw the emergence of schools and universities as holding the key in this process. He however felt that the universities or the highly educated alone could not usher in the era of innovation, as several start-ups had started off with a humble beginning to make it big. Dwelling at length on the economics of digital platforms, he explained how to strike a balance between the seller and buyer (of content, services). Price structure has nothing to do with cost allocation, he said, explaining the case of Google which offered a host of free services including an impressive search engine, email, YouTube video streaming etc., while charging the advertisers heavily. Even the same holds good for debit/credit cards where the customers get discounts, cash back and bonus, but the merchants end up paying more, he said.

Breach of privacy

Even while creating wealth, the digital economy also offered its share of crime and asked the stakeholders to be wary of it. On breach of privacy, Prof. Tirole expressed concern over the way people ignored the fine print by clicking on the ‘Terms and Conditions’, signing ‘Informed consent’ without reading and accepted unknown cookies, unmindful of the consequences.

Prof. Tirole also spoke on the creation and destruction of jobs in the new economy, akin to job losers due to globalisation and technology change. “The advent of robots and online marketing could lead to job loss, but there will be more jobs in delivery and highly-skilled areas,” he predicted.