Economic Development

Technology as a Determinant of Economic Development

Technology refers to better techniques or methods of production. Technological changes are

anything that helps us produce things faster, better or cheaper. Schumpeter observed that

innovation or technological progress is the only determinant of economic progress. But if the

level of technology becomes constant the process of growth stops.

Different Applications of Technology

● Social Technology

-concerned with the improvement of values and attitudes of people

-is a way of using human, intellectual and digital resources in order to influence social

processes.

● Public Administration Technology

-deals with the improvement of social goods in order to maximize the satisfaction of social

wants.

Every public body must necessarily deal with the fact that people expect to find all the

information they need on the internet and social media.

Schumpeter

● The discovery of a new technique is an invention.

● He pointed out that the practical application of an invention to production for the market

is innovation. However, not all innovations are for the markets.

● By innovation he means, the changes in the methods of production and transportation,

production of a new product, change in the industrial organization, opening up of a new

market, etc.

Research and Development require big funds. Through these, better ways of doing things or

producing goods are discovered.

How do rich countries take research and development in making their economy thrive and how

do less developed countries cope up with this?

Technology for the Less Developed Countries

Is the importation of technology wrong for the less developed countries?

Why is technology significant to them?

Imported technology should be suitable to local conditions.

The economic, social, cultural, political, and managerial aspects have to be taken into

consideration in the application of foreign technology.

OTHER CONSIDERATIONS IN APPLICATION OF TECHNOLOGY

*LOCAL CONDITIONS

Many years ago, Japan Completely copied the agricultural technology of United States and

England and applied this in its farms. The result was dismal failure since the imported

machineries are not appropriate.

*POPULATION

A poor country with a very large population of unemployed should give first priority to labor

intensive technology

*LOCAL CLIMATE AND SOIL CONDITION

Professor Gunnar Myrdal, author of Asian drama, noted that Western technology has been

adopted in Southeast Asia without proper consideration of local climate and soil conditions.

*LABOR INTENSIVE TECHNOLOGY

Poor countries have an oversupply of unemployed and underemployed individuals, they should

therefore use labor-intensive technology.

*CAPITAL INTENSIVE TECHNOLOGY

Industrial countries use machines or capital-intensive technology, because labor is scarce and

expensive. Then it is more economical for them to use machines rather than employ workers

*INTERMEDIATE TECHNOLOGY

Schumacher, author of Small is beautiful, suggested intermediate technology for the less

developed countries. This type of technology is between primitive technology and modern

technology. Such technology is labor intensive.

TECHNOLOGY IN DEVELOPING COUNTRIES

Technological advancement is unambiguously correlated with globalization. The rapid spread of

technology fueled by the Internet has led to positive cultural changes in developing countries.

Easier, faster communication has contributed to the rise of democracy, as well as the alleviation
of poverty. Globalization can also increase cultural awareness and promote diversity.

Advantages & Disadvantages of Technology in Our Economy

ADVANTAGES

● Contributing to GDP growth

● Increasing efficiency and mobility

● Improving communication and collaboration

● Adding to cyber-crime and security concerns

DISADVANTAGES

● Causes Environmental Problems.

● Dependence as a downside of technology

● Unemployment for workers

● Addiction to Technology of the People

● Moving faster than regulations can catch up