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Development Economics

Development Economics. Development Economics. Technology and Economic Development. Technology and Economic Development.

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Development Economics

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  1. Development Economics

  2. Development Economics Technology and Economic Development

  3. Technology and Economic Development The history of economic growth reveals that the production phenomenon is associated with labor, capital, technology and organization etc. however, the stress upon each factor of production has been changing from time to time. In the early periods of classical days, labor was the only factor of production. Afterwards, capital was accorded the major determinant of economic growth. But in recent days whole of the emphasis is being laid upon technological change – the main source of economic development. Perhaps, the role of technology got much more importance due to labor shortage in the western countries; the desire to attain higher growth rates; the aim of maximizing the outputs; to reduce the cost of production etc can be achieved with technology.

  4. Technology and Entrepreneurs in Economic Development …. continued The UDCs which have shortage of advance technology have been found backward. In other words, the poverty and backwardness of UDCs is attributed to the poor level of knowledge and technological change. Therefore, if these countries use advanced technology they can also join the race of economic development. Accordingly, the UDCs should introduce modern technology whether it is indigenous one, or it is acquired through external sources. Not only technological change, but the entrepreneurial abilities can also be employed for the greater rates

  5. Importance of Technology in Economic Development • The importance of technology in economic development is explained with the help of the following points: • Agricultural Revolution: • Till a long time old seeds, traditional techniques, ploughs and garbage etc were used in agriculture as a result, the levels of agriculture outputs were very low. • With the help of modern technologies the High Yield Seeds have been invented; the superior fertilizers have been produced; the threshers, tractors and harvesters have been produced; tube wells and water pumps have been prepared; and the insecticides and pesticides have been popularized. • Because of such all the agriculture sector has experienced a revolution – known as “Green Revolution”; which has led to bumper crops. The agriculture sector has become a profitable profession and with this the food shortages have been put to an end forever.

  6. Importance of Technology in Economic Development 2. Industrial Revolution: In the earlier days, the life was very much limited. Not only the population was low but the desires were also limited. In such situation, the demand for industrial goods was nominal. But with the passage of time the changes occurred regarding population, desires and demand. The needs for machinery, tractors, automobiles, bulldozers, cement plants, turbines and generators etc were realized. If the world had not experienced the technical development it would not have been possible to produce such all goods. Thus it is the modern technology which has made it possible to produce the goods in bulk amounts as thousand tons of fertilizers, millions of vehicles, billions of motor cycles, trillions of television and what not. Consequently, the technological development along with industrial development has made it possible to satisfy the desires of thousands of consumers.

  7. Importance of Technology in Economic Development 3. Reduction in Costs of Production: Because of modern technology the firms are in a position to enjoy economies of scale. Modern technology has increased the production of the firm which has decreased the per unit cost of the firm. Also, the wastages are utilized and the by-products are produced with the help of modern technology. As the board, chipboard and hardboard are prepared with the sugarcane straw. through such like measures the costs of production can be decreased which will lower the prices which will be beneficial for the consumers.

  8. Importance of Technology in Economic Development 4. Discovery of Natural Resources: The nature has hidden a lot of its deposits under lands, seas, mountains and in the skies. It is the modern technology which enables the man to explore and utilize these resources. If there had been not the modern technology, the oil, gas, iron, coal, gold, tin, copper and silver could not have been explored to be used for the betterment of mankind.

  9. Importance of Technology in Economic Development 5. Improvement in Standard of Commodities: It is the modern technology which helps in the improvement of quality of the products. The new designs are discovered. The technical defects in the goods are removed. As the case of “Radio” which have had its start from a huge electric set which has now turned into transistor and mini-transistor sets – all such is due to modern technology which has benefited the world community as a whole.

  10. Importance of Technology in Economic Development 6. Gaining Competitive Advantage: Nature has not endowed all the nations with same resources. Some countries are heavily endowed with labor; some are rich in land and some others are rich in capital. The developing countries which are deficient in technology can import technology. Then with this technology the cheaper goods can be produced by utilizing the abundant factor. Following this policy the countries like Korea, Singapore and Taiwan etc have accelerated their growth rates.

  11. Importance of Technology in Economic Development 7. Boosting the level of employment: Because of new technology new goods can be produced. This will lead to increase the demand for laboring class as well as the skilled people like technicians, engineers, accountants, business executives etc. As a result, the employment and incomes of the people will increase. This will lead to increase the welfare of the masses, both at country level as well as at world level.

  12. OBSTACLES IN THE WAY OF TECHNOLOGICAL CHANGES IN LDCs 1. Monopoly of DCs and MNCs: It is obvious that the DCs and MNCs are having monopoly over the modern technology. It is because of the reason that they are spending greater amounts of money on “Research and Development”. These DCs and MNCs charge higher prices while transferring technology to UDCs.

  13. OBSTACLES ….. continued 2. Spread of Dualism: The modern technology has promoted dualism in the poor countries. The DCs have been found transferring the technology to those sectors of the economy which are concerned with the exports. As US firms have provided modern technology to Middle East just for the sake of oil exploration and its refinement etc. same happened in case of “Rubber” in the countries like Indonesia and Malaysia. In such state of affairs, a few sectors developed while whole of the remaining economy remains backward

  14. OBSTACLES ….. continued 3. Lack of compatibility with the domestic needs: The technology which is introduced by DCs is concerned with their own circumstances having no compatibility with the needs of the poor countries. Moreover, most of the imported technologies are capital intensive which reduce the use of labor in the economy. As due to use of computers in every field the demand for labor is decreasing in the poor countries. Such type of technologies would not only be burden on the BOP of a country, but it would also encourage unemployment.

  15. OBSTACLES ….. continued 4. Backward social setup: Economic development requires a change in mental outlook of the people. Modern technology can not be practiced how long the people of the country do not like it. The people from the poor countries are rigid, they have unscientific and inflexible behavior. They are hardly prepared to accept new thinking, new ideas, new techniques, new instruments, new research and new machinery. Thus when people show a low response for the modern technologies, how they can be applied. Again, the modern technologies require the expertise in a fairly large amount. As they are short in LDCs, they will have to import then leading to a big burden on BOP.

  16. OBSTACLES ….. continued 5. Limited Domestic Markets: In the poor countries the markets are limited whereas the modern technologies are concerned with large scale production. Therefore, if goods on large scale are produced with the help of modern technology they can not be sold in the domestic market leading to over production. If the over-produced products could not find market in the international market, it will lead to great loss to the producers.

  17. Thank You

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