“Come on new ideas, we’re ready for you.”

Over a three day UBS event in Hong Kong and Taipei, Nobel economists discussed the role of young people in making change happen and the importance of being able to flourish in an environment of change.

17 Oct 2019

Will a robot do everything that we can do, and better?

Discussing future technologies and work environments, the Nobel economists shared a rather optimistic view. “There will be job displacement, and it’s very important how we address it,” said Robert Merton. “But robots also create jobs that didn’t exist. They create things that will actually enhance job opportunities.” The 1997 Nobel laureate pointed out how technology has been changing the world we live in for decades – and not for the worse. “You’ve adapted, and what you’ve used technology for is not to get free time from working, but to be able to do much more, increase your productivity.”

Holmström stressed the importance of having the right attitude. “You need curiosity. You need to ask questions. It’s that attitude that is critical for where you’ll end up.” Merton agreed with his MIT colleague, noting that “change is right here, so prepare yourself. When opportunity knocks, you’re going to say, ‘Come on change, come on robots. Come on ideas that no one ever thought of before. I’m ready for it. I’m going to flourish in an environment of change rather than be fearful.”

Moderator Donna Kwok asked how small businesses and young entrepreneurs could keep up with change and spark innovation. Michael Spence pointed out the differences across cultures in attitudes towards failure. “Failure is inherent in experimenting, which is where innovation comes from. There’s no such thing as real innovation in a totally safe environment.” He provided the example of Silicon Valley, where failure as an important driver of innovation is highly valued. “If you talk to experienced venture capitalists, they’ll tell you they’d rather have an entrepreneur that tried and failed for the right reason. ‘Learned a lot along the way’ increases the chances of success later on.”

In 2017, UBS took the Nobel Perspectives initiative to the next level, with an event in Singapore marking the beginning of what’s now become a regular event series, Nobel Perspectives Live! After Singapore, the program traveled to Shanghai, New York, and London. In September 2019, Nobel Perspectives Live! stopped in Hong Kong and Taipei with Nobel economists Bengt Holmström, Robert Merton, and Michael Spence.

At the Hong Kong Stock Exchange, the three Nobel laureates took the stage, accompanied by Donna Kwok, APAC COO Strategy Lead for UBS Asset Management, and Amy Lo, Head and Chief Executive of UBS Hong Kong. In the audience, 500 students from local universities were eager to learn more about the two topics of the evening: sustainable growth for Asia, and the future of the millennial generation in a fast-paced world.

How can we be more sustainable?

“Reducing the energy intensity of growth patterns, I think we understand that,” opened Michael Spence. “What I think is starting to happen, and it’s a very good sign, is the world is coming together, saying, ‘What can we do to help developing countries help themselves?’ Energy-efficient systems, properly designed cities, new technologies. Lots of things are going to be necessary if we’re going to succeed.”

Bengt Holmström continued the conversation on sustainability by underlining the role of young people in making change happen. Who would have thought that a 15-year old calling for climate action in front of the Swedish parliament would catalyze a student movement across the globe? “How fast sustainability is going to move is in the hands of you,” said Holmström. “History shows that politicians start moving when the young people are moving. It does matter. It may be the only thing that matters.”

Spence observed that the awareness of environmental challenges was rising in Asia, but also globally. “Coal is by far the dirtiest fossil fuel, but it’s also the cheapest fuel and the most accessible one, for example in India,” the 2001 Nobel laureate explained. “10 years ago, Indian politicians would have said, ‘We’re going to burn the coal. We’ll get around to the global agenda later.’ That’s no longer the answer.”

Will a robot do everything that we can do, and better?

Discussing future technologies and work environments, the Nobel economists shared a rather optimistic view. “There will be job displacement, and it’s very important how we address it,” said Robert Merton. “But robots also create jobs that didn’t exist. They create things that will actually enhance job opportunities.” The 1997 Nobel laureate pointed out how technology has been changing the world we live in for decades – and not for the worse. “You’ve adapted, and what you’ve used technology for is not to get free time from working, but to be able to do much more, increase your productivity.”

Holmström stressed the importance of having the right attitude. “You need curiosity. You need to ask questions. It’s that attitude that is critical for where you’ll end up.” Merton agreed with his MIT colleague, noting that “change is right here, so prepare yourself. When opportunity knocks, you’re going to say, ‘Come on change, come on robots. Come on ideas that no one ever thought of before. I’m ready for it. I’m going to flourish in an environment of change rather than be fearful.”

Moderator Donna Kwok asked how small businesses and young entrepreneurs could keep up with change and spark innovation. Michael Spence pointed out the differences across cultures in attitudes towards failure. “Failure is inherent in experimenting, which is where innovation comes from. There’s no such thing as real innovation in a totally safe environment.” He provided the example of Silicon Valley, where failure as an important driver of innovation is highly valued. “If you talk to experienced venture capitalists, they’ll tell you they’d rather have an entrepreneur that tried and failed for the right reason. ‘Learned a lot along the way’ increases the chances of success later on.”

Economic growth versus sustainability?

After two days in Hong Kong, Robert Merton continued his journey in Taipei, where he met with students at National Taiwan University for a session on sustainability, innovation, and disrupting technologies.

Raymond Yin, Head of UBS Asset Management Asia Pacific and moderator of the session, wanted to know if a more sustainable economic approach would necessarily oppose growth by imposing more regulation. Merton disagreed: “With technological progress, we can have both growth and sustainability. It’s not impossible. It’s not growth versus sustainability. Doing the right thing versus making more money. Sometimes those are conflicts, no question, but don’t take those as universal.”

Merton didn’t leave the stage before offering a word of encouragement for the young people in the audience. “How do you encourage people to explore, to take on a situation where no one can teach you what to do?” The Nobel laureate smiled wistfully. “I am optimistic. I look at all of you, and I think you can handle it. Let’s not be complacent, and let’s not look for simple-minded solutions. You have the tools to go into exploration.”

More Nobel Laureate stories

What’s the key to happy, productive employees?

Bengt R. Holmström

Nobel Laureate, 2016

How can we reestablish trust in the financial sector?

Robert C. Merton

Nobel Laureate, 1997

How can developing countries stimulate their growth?

Michael Spence

Nobel Laureate, 2001