Will our new investment cycle be Keynesian or Schumpeterian?

Whether it's old industries or new that will see asset creation matters because their ideal supportive policy frameworks differ

- NIRANJAN RAJADHYAKSHA

Marc Andreessen first shot to fame as a young technology entrepreneur in the 1990s. His company launched Netscape Navigator. It soon became the most popular tool to browse the internet. A complex legal battle with Microsoft followed. The company was eventually sold in 1998 in a deal that was one of the defining moments of the internet era. Andreessen is now a venture capitalist.

Andreessen wrote a prescient essay in April 2020 calling for a new era of ambitious building: “aggressive investment in new products, in new industries, in new factories, in new science, in big leaps forward." The essay was written when countries around the world were struggling to cope with the pandemic shock. Healthcare systems were crumbling under pressure. Vaccines were still in the future. His call for a new wave of building was aimed at the US, but there were lessons for other countries as well.

The pandemic is now over. This is a good time to ask whether the world is actually entering a new era of asset creation that Andreessen called for in April 2020. There are signs that many countries are pivoting towards bringing manufacturing closer home, rebuilding energy systems to deal with the threat of climate change, rethinking transport systems as well as personal mobility, and creating new infrastructure. Is this decade going to be marked by a massive capex boom?