Kaikho Hriizhiinio
PhD Scholar, Hyderabad School of Economics, University of Hyderabad
Growing up in the Naga Hills in the 1990s. My worldview was confined to a 10- to 15-minute local news program on the radio my Dad owned. I often wondered how it could deliver global news in just minutes. Even with minimal information, we could imagine a borderless world. Many share this experience. Today, the future has arrived with smartphones and other forms of digital connectivity. Artificial intelligence (AI), which can function like human intelligence, is rapidly transforming our socio-economic landscape and presents us with a dilemma between prosperity and displacement. A question that emerges in this context is: Will AI propel our growth or widen displacement and erode our hard-earned skills?
To answer whether AI will be an engine of growth or a catalyst for decline, we cannot rely on intuition alone; we must be grounded in established economic growth theory. Nobel laureate economists such as Robert Solow, Trevor Swan, and Paul Romer have emphasised that technological progress drives long-term economic growth. While exogenous growth treats technology as an external factor, the endogenous growth model views sustained prosperity as depending on internal factors: knowledge, research, and human capital. Exogenous growth relies on external tech shocks, while endogenous growth stems from internal investment in human capital and innovation. For Nagas, this means that AI will not automatically generate wealth unless we cultivate the cognitive infrastructure to harness and augment human capital. Without this strategic policy adaptation, there is a risk of stagnation, skill depreciation and widening inequality, leaving the region or state dependent on external aid rather than achieving the self-sustaining, endogenous growth seen in success stories like South Korea.
Endogenous growth theory holds that human capital is a critical factor in economic prosperity, but what does that mean for Nagas in 2026? The World Economic Forum's Future of Jobs Report 2025 explains this answer. The report identifies analytical thinking, resilience, creative problem-solving, and technological literacy as the defining competencies of the AI era. Conversely, traditional roles that once offered stability—such as data entry, cashiering, administrative support and clerical banking—are in structural decline. This shift confirms that innovation in the AI era depends entirely on human cognitive abilities that automation cannot replicate. Sustained growth will stem from new ideas, making higher education and continuous learning not merely aspirational, but existential necessities for Naga youth. Yet, adoption of new skills is not sufficient if the economic structure cannot absorb them. Over-dependence on government jobs will create a bottleneck that stifles the very innovation the AI era demands. Economist Joseph Schumpeter’s concept of “Creative destruction” requires a dynamic private sector where entrepreneurship and research and development can flourish. Creative destruction occurs when innovation replaces old industries, driving progress. Government job saturation distorts the labour market, discourages risk-taking, and leaves little room for tech-driven growth, which is crucial for modern growth. To avoid mass youth unemployment, we need to build capacity in enterprises.
However, the most dynamic private sector cannot thrive without social cohesion. For entrepreneurship and R&D to flourish, political stability and unity are essential. The European Union model shows that diverse identities can coexist within shared economic rules, fostering mutual benefits. Emphasising this can inspire Nagas to value peace and inclusive governance as foundations for collective progress and shared prosperity.History shows that effective policy harnesses AI and other advanced technologies to mitigate displacement and inequality. Strategies proven in South Korea and China offer a roadmap. They include: efficient capital allocation, robust infrastructure, and state-supported R&D. The state government provides equal opportunity by providing digital devices to low-income and disabled students and ensuring digital literacy becomes a universal baseline. Furthermore, we must establish socio-economic, health sciences, and environmental sciences research centres to support practical AI applications, including addressing indigenous Naga ways of life, disaster prevention, and other indigenous issues. Higher education, vocational training, and cognitive skills must align with market trends, moving beyond outdated curricula to prepare youth for the global realities.
These policies do not guarantee success; they create conditions under which AI becomes a multiplier of individual capacity, as Amartya Sen noted, rather than a source of disruption. Therefore, growth or disruption is not determined by technology itself. It is important to build the educational, economic and social foundations in an ethical approach to embrace prosperity. If we embrace a holistic approach, AI will not erase our identity or potential but will instead amplify it, transforming the borderless world once imagined on the radio into reality.
