| CERES No. 55 (Vol. 10 No.1) Jan.-Feb. 1977 |
by Patrick Vandenberghe
Whereas the anatomy of underdevelopment is relatively well understood, its underlying determining causes are less well known and, considering the many setbacks we have suffered, we must admit our ignorance as to how to spark or accelerate the development process. For instance, it was once thought possible to reduce the technological gap between industrialized and developing countries by the simple transfer of technology - an easy solution but one that entailed atrophy of research and development in the emerging countries as well as their ever greater dependence upon the industrialized ones.
Seeing that the backwardness of underprivileged countries goes hand-in-hand with a considerably lower proportion of researchers and professionals in the economically active population as compared with industrialized countries, and that the scientific community appears to grow with development and progress, how far can underdevelopment be attributed to the weakness of the scientific base? And, if it is possible to demonstrate a certain causal relationship, how can the problem be remedied?
The neoclassic theory of production and distribution," as R. Nelson calls it, considers research and development (R & D) forms of investment that enhance the productivity of the other production factors.
One might well ask why the developing countries adopt the technology of the industrial countries ? Some of them-as apparently transpires from the neoclassic theory - think that this technology constitutes the only path to development. However, the explanation might be found in the fact that it is the industrial countries that furnish the technology and thus impose themselves as models.
Present-day development has often been compared to the industrial revolution; and it is concluded that it is to some advantage for the developing countries to be "virgin" and start out on the road to development somewhat late, in the manner of the Western European countries adopting British technology, developing it and eventually surpassing the United Kingdom itself. But this analogy appears erroneous. As Myrdal explains, the conditions propitious to the absorption of technology at that time in Europe- such as the existence of a technological tradition, of university research centres, of a certain level of education, of scientific background, of similar value systems and of the availability of capital-are not to be found in developing countries. Furthermore, whereas the technology of that time could be reduced to rather elementary mechanical concepts, the inter-relationship between scientific discovery and technological innovation today is very close.
Another important aspect of today's science and technology is its dynamism: the speed of scientific advance, which is constantly accelerating, follows an exponential curve (Henry Adams).
The consequence of this situation is obvious. The ever more pronounced gap between industrialized and developing countries manifests itself not only in production and consumption, but primarily-and this is the most serious feature-at the level of assimilation and production of ideas and techniques. Results are important, but they are only the fruit of an exercise. It is not enough to erect factories and hand over the keys, or just to organize agricultural enterprises. The know-how, the technology, must be acquired and understood.
Shumpeter finds, in the new technology, that tension which will force the economic structure to evolve represented by a function of global production in evolution. This obviously corresponds to the demand and supply side of the economy. In the framework of a developing economy, it is evident that the global preference structure (the society's system of values) from the side of the economy's supply and demand must be taken into consideration. Thus, the interaction of economic structures with the preference structure will cause tension and determine its intensity. Yet, the existence of scientific knowledge and technical know-how and of a propitious institutional structure, as well as availability of capital, will not suffice to produce the requisite tension in a society that does not valorize progress and which is not prepared to make the necessary sacrifices to achieve it. This is where the role of a native scientific community becomes significant. This does not confine itself to the " treatment " of foreign technologies, but assumes responsibility for " directing " the evolution of society's values.
How then can the current situation be remedied? To foster the implantation of a scientific and technological base in any developing country, top priority must of course be given to education. The educational system should be geared not only to the vocational training of operatives, but also to scientific training at all levels.
As to what funds can be utilized for such purposes, as a starting point one could consider the costs due to dependence upon foreign technology resulting from the relative inertia, as well as the potential benefits that might be generated by a policy of scientific-technological development, not direct benefits alone but also indirect ones, in terms of employment opportunities, of national revenue, and of the impact upon the economy, etc.
A natural result
S.J. Patel reports that, according to recent UNCTAD studies, there are three major categories of costs to be considered:
direct costs: payments for patent rights, licences, processes and trademarks, and for technical services necessary at all levels, from the preinvestment phase to complete operation of an enterprise;
indirect costs: much heavier, consisting of hiked import prices for commodities and intermediate equipment, the supplying of which is often reserved by contract to the furnishers of technology; profits on the capitalization of know-how; part of the profits repatriated by company subsidiaries or limited-liability corporations; the hiking of the cost of the technology incorporated in the cost of imported goods and equipment;
miscellaneous costs: restraints imposed in agreements for technological transfer; transfer of wrong or unsuitable technologies; long-term influence of imported technology, which detours national policies from the healthy development of their own technological capacities.
As for the correct orientation of the technology to be created, it is a matter of note that modern technology is capital intensive; this is a natural result of the very orientation of research and development in economies that have a relatively small labour force in comparison with their capital resources. It might be thought that the reason for the inefficiency in terms of the production of labour-intensive technologies comes from the fact that nothing has been done to develop the latter. This illustrates the importance of the insertion of R & D that is permitted by each country's resources, not only in terms of their manpower and capital resources but also in terms of the whole of the resources with which each country is endowed, as in a sense "one is best served by one's self."
Concerning the agricultural sector, rather than encourage local research in developing countries, it seems unfortunately that the international agencies tend to favour the transfer of the results of Western research. The modern technology of industrialized nations is not so conceived as to be readily absorbed by the existing structures of the emerging countries. Technical innovation in agriculture can only be introduced in conjunction with and at the same rhythm as rural development.
The importance of local research and development in developing countries is confirmed in the case of agriculture. It does not suffice to envisage training in terms of production of technicians capable of applying imported technology. It is necessary to create the capability for doing both fundamental and applied research permitting pertinent adaptation as well as creation of technology; having no scientific communities of their own, nations become dependent and reliant upon the transnationals that control their economic life, not by ownership of physical assets but by the power derived from their ownership of technological processes. Without their own technology, the developing nations are forced to buy manufactured products and/or licences at monopoly prices. `'Monopolized" technology results in ever greater inequality due to the manipulation to which it lends itself. The green revolution, for instance, transforms farming into an industry with definite requirements in terms of imported inputs, demanding massive amounts of capital, causing disintegration of the old agrarian structure, and tending to favour already privileged groups backed by the might of capital.