|United Nations University - Work in Progress Newsletter - Volume 15, Number 1, 1998 (UNU, 1998, 12 pages)|
By Ajit Bhalla
Surely one of the most important responsibilities the technological planner faces today is choice. New software, new networking tools, new efficiencies come on the market with disconcerting speed. The bewildering blur goes to the heart of a crucial development dilemma today examined here by Ajit Bhalla: What is the proper mix of technologies? How much of the new to adopt? How much old to jettison? Picking wrong can spell disaster for the country - as one African nation discovered in the 1970s when a choice in computing system caused the whole national budgeting process to grind to a halt.
In the early development decades, the vote was invariably for the biggest, the shiniest and the most advanced, often a regrettable choice. Today, the need is to widen the set of technological options - with one intriguing choice being that of "technology blending." Dr. Bhalla, an Indian economist who has taught in Delhi, Yale and Oxford, is Chief, Technology and Employment Division, ILO, Geneva. The following is excerpted from his chapter in the UNU volume, The Uncertain Quest. - Editor
The emergence of new technologies in the early 1980s first produced doomsday scenarios predicting unprecedented negative employment effects and social evils pervading the entire economies and societies of industrialized countries. Very soon, however, it was realized that the pace at which new technological breakthroughs were expected did not really materialize, partly owing to economic recession and resulting sluggishness of demand, and partly to a shortage of new types of polyvalent skills required. It was perhaps also due to the inertia of conventional styles of management as well as the ignorance of policy makers about the potential benefits of new technologies.
The new technologies are heavily dependent on scientific research and development, which explains why, with few exceptions, most of the production of these technologies is concentrated in the industrialized countries. The enormous investments required are simply beyond the capacity of most developing countries. Apart from capital investments, the human resources required - scientists and engineers, systems analysts and multi-skilled technicians - are often not available in developing countries. For these reasons, the new technologies are concentrated in and controlled by big multinational corporations with enormous resources and organization.
Some empirical knowledge on the impact of new technologies has now been accumulated. Three sets of studies may be noted: global or "synthetic" studies, sectoral investigations, and micro analyses. Much of the work is of a micro nature.
Despite the initial tears of massive unemployment due to the use of micro-electronics-based technologies, the limited experience of both industrialized and developing countries shows that the impact of these technologies on direct and indirect employment may in fact have been marginally positive. The pessimistic predictions did not come true partly because of the economic recession. Furthermore, while the new technologies may displace labour in old activities, they generate additional demand for labour by creating new goods and services.
But one thing is clear from our present inadequate state of knowledge: the micro-electronics-based technologies are bound to affect not only the quantity of employment, occupation composition, and the labour market but also its quality - in terms of flexible types of employment, shorter working hours, home-based work, and quality of working life.
The new technological revolution is also likely to have a tremendous potential influence on the distribution of income within and between countries. Yet empirical evidence of the nature of these distributional implications is even more sparse than their employment implications.
For example, little is known about the effects of microelectronics technologies on the distributions of incomes, on the distribution between producers and consumers and between producers and workers. Also it is not clear whether the effects of microelectronics on income distribution will be different from those of the Green Revolution. It has been argued that microelectronics will probably have a greater impact on products than the Green Revolution did, and that the bias is likely to be weighted in favour of larger producers and multinational corporations. In the case of consumers, the gains may accrue mainly to the rich consumers in developing countries who can more easily afford the products incorporating microelectronics (e.g. watches, clocks, passenger cars). However, there has been little empirical testing of these hypotheses.
The new technologies will clearly exert a significant influence on the developing countries, both directly and indirectly:
Directly, with increasing globalization of production and international competition, the export-oriented countries will be compelled to use new technologies to compete with the industrialized countries. The increasing production and use of new technologies in the industrialized countries is likely to widen the already serious technological gaps between countries. The fear of being left behind is likely to put pressures on developing countries to make a selective start with the use of new technologies.
Indirectly, the use of new materials and new biotechnologies in the industrialized countries is already hurting the exports of primary materials and commodities from the developing countries. They have little control or influence on the "dematerialization of production" and the substitution of new for old commodities taking place in the industrialized countries.
Advantages of "Leap-frogging"
As latecomers, developing countries may be able to take advantage of new technologies to "leapfrog" from manual methods directly to flexible manufacturing systems. However, leap-frogging presupposes the existence in these countries of organizational and innovation capabilities to produce new products through the use of high technology. It also assumes that the developing countries possess technological capability at a sufficiently high level to assimilate the high technology efficiently.
Yet few advanced developing countries meet these prerequisites. The majority of developing countries are at an early stage of industrialization, with small industrial sectors. For these countries, the usefulness of new technologies would not be for material industrial development. They would be immensely useful, however, in the development of human capabilities through, say, the application of microcomputers for the delivery of health services to rural areas or the use of computers in education. New technologies could, for example, raise the efficiency of the traditional education system and permit training outside the school system.
Blending - Retain the Old
In the majority of developing countries, the greatest potential for new technologies is probably though so-called "technology blending" - a combination of new and traditional technologies without destroying the old. This concept of blending was introduced in 1983-84, and the idea originated from the growing recognition that the benefits of modern science and technology in the developing countries had not trickled down to the rural and the urban poor.
In most developing countries, despite the availability of advanced technologies, age-old low-productivity techniques continue to be used. The key question is: can the application of new technologies to traditional activities lead to a process of gradual modernization rather than displacement?
But is technology blending just another name for appropriate technology - the concept that so fascinated development thinkers in the 1970s? Like appropriate technology, the blending concept does not refer to a choice from among an existing techniques but rather to the development of new ones that would be more suited to the needs of the poor developing countries.
While the concept of appropriate technology refers mainly to incremental innovation, blending implies a quantum leap on the part of developing countries that do not have to go through all the stages followed by the technological leaders of today. The scope for leapfrogging is potentially enormous.
Technology blending may be best analysed in terms of the objectives sought and the characteristics of the new technological variant. The objective is simple enough: to bring the benefits of the new technology revolution to bear on improving the standards of living of the rural and urban poor. To some extent this aim determines the required characteristics of technology blending.
As a general rule, two extremes can be envisaged. At one extreme, a technology blend would reflect almost entirely the characteristics of the new technology. At the other extreme, the blend would largely reflect the traditional method. In practice, acceptability of technology blends for the rural and urban poor can be ensured if their characteristics are not too far removed from those of traditional technology.
As the rural and urban poor lack purchasing power (their incomes are generally far below average), it is clear that the technology blends cannot be too expensive, demanding cash outlays that are beyond the reach of their intended targets. In the initial stages, diffusion of new technologies to rural areas may have to be subsidized in the same way as were the agricultural inputs during the Green Revolution. The blends should also be easily comprehensible, easy to maintain and repair.
Whatever the blending possibilities, it seems clear that, for the foreseeable future, the new technological component of this scenario will continued to be produced mostly in the industrialized countries. We may also see wider gaps begin to open up among the developing countries themselves - with the newly industrialized nations, for example, surging even further ahead. A growing divergence of Third World interests may be explained in the future partly in terms of the technological factor. This underlines the degree to which technological capability building and choice has become a major element in development debate.