A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Lütkenhorst, Wilfried Article — Digitized Version New technologies and industrialization prospects of developing countries Intereconomics Suggested Citation: Lütkenhorst, Wilfried (1989) : New technologies and industrialization prospects of developing countries, Intereconomics, ISSN 0020-5346, Verlag Weltarchiv, Hamburg, Vol. 24, Iss. 3, pp. 127-137, http://dx.doi.org/10.1007/BF02928564 This Version is available at: http://hdl.handle.net/10419/140187 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu INDUSTRIALIZATION Wilfried L~tkenhorst* New Technologies and Industrialization Prospects of Developing Countries Industrial technologies are both an outcome of the industrialization process and one of its main driving forces. The introduction of new technologies can be seen as one of several important factors which directly and indirectly change the context and modes of international industrial production, thus being among the key determinants of the international division of labour. Given the accelerating pace of technological development in industry, there is an urgent need not only to identify incipient technological breakthroughs but above aft, at an early stage, to analyze their short- and long-term implications for the worldwide inc/ustria/ization process and to reassess the va/ic/ity of crucial assumptions unc/er/ying c/eve/oping countries' current industrial strategies. I n the advanced industrialized countries where Process technologies are applied in industrial I technological developments in industry have been enterprises with a view to increasing productivity or to concentrated, new products are continuously responding better to other market requirements. As a introduced which either substitute or supplement means of production, they come both embodied, i.e. in existing products. New production processes are being the form of industrial machinery and equipment, and applied which have higher productivity and/or different disembodied, i.e. in the form of know-how, experience, factor proportions, higher flexibility and different managerial and organizational skills. This is an economies of scale. In place of some materials extremely important point to recognize: it means that traditionally supplied by developing countries, new each technology - and above all new sophisticated materials are being introduced. These innovations in ones- is to be seen as an integrated hardware-software turn lead to changes in production costs, quality, timing, package with the interaction of these two components etc. and thus to changes in the competitive system both greatly determining its costs and benefits. at the micro- and at the macro-economic level. Closely related to the above, it is currently to be As a result, adjustment pressures on developing observed that industrial services are assuming an ever countries have increased and so may, with some greater importance. This is true in a double sense. First, notable exceptions, their technological dependence. new sophisticated production technologies can only Obviously, the pursuance of the industrialization efficiently be operated within an overall system of process will force these countries to participate in one support services such as telecommunication; advanced form or another in the international technological race. repair and maintenance services; computer software With the race accelerating in speed and in costs, many specialists; and R&D inputs. Second, at the company developing countries will face great difficulties in level the "service content" of manufacturing is following: only a few may succeed in keeping abreast in increasing, e.g. through the use of computer systems for highly selected areas of technology. For the majority of developing countries, new technologies will have to be 1 The article discusses major issues raised in the UNIDO Expert Group acquired from abroad rather than developed Meeting on Prospects for Industrialization Policies in Developing Countries Taking into Account the Impact of Developments in the Field of domestically. Restricted property rights and high New and High Technologies, held 4-7 April 1989 in Vienna. For this technology transfer prices will constrain this acquisition. meeting specific case studies have been prepared for UNIDO on the industrial policy and strategy implications of recent technological So will prevailing scarcities in financial resources and advances in telecommunications (Kurt Hoffman), machine tool industries (Staffan Jacobsson), textiles and clothing industries (Kurt human skills. Hoffman), biotechnology (Martin Fransman) and new and advanced materials (Lakis Kaounides). In the paragraphs describing the new technologies the present article draws on these case studies which will soon be published by UNIDO. Thanks go to Herman Muegge, UNIDO, * United Nations Industrial Development Organization (UNIDO), for a critical review of an earlier draft. This does not affect, of course, the Vienna, Austria. The views expressed in this article are those of the author's responsibility for remaining mistakes or inadequacies of the author and do not necessarily reflect the views of the U NIDO Secretariat. text. INTERECONOMICS, May/June 1989 127 INDUSTRIALIZATION design, quality control, inventory handling, etc. Indeed, above all they have had a profound impact on industrial "information technologies have created a symbiosis production processes. CAD/CAM, CNC control units, between development in the manufacturing and the CIM and FMS are but a few acronyms which have services sectors". 2 Two brief further comments are in become common language in modern manufacturing. 5 order in this regard. First, the services emphasized [] Scope of impact. Closely related to the above point, above are knowledge-based in nature and productivity- the new technologies can be characterised as raising in their effects. They represent highly productive pervasive, i.e. in their application they cut across many inputs to the production system and have nothing in sub-sectors of industry (and not only industry). common with the traditional notion of services being Conventional classifications of industrial sub-sectors low-skill, low-productivity activities. Second, and and activities therefore tend to become less meaningful following straight from the previous point, these services or blurred. This is the case e.g. in machine tool are directly industry-related. A recent OECD study production which now includes as much electrical as concludes that more than 50 % of all market-oriented non-electrical engineering and in food processing and services in OECD countries are of a directly production- pharmaceuticals production in which similar new related nature. 3 Hence, while it appears to be true that biotechnologies are developed and utilized. the advanced industrialized countries are gradually becoming service economies, it is certainly grossly [] Direction of impact. Though implicit in what has been misleading to equate this with a trend towards a post- said so far it needs to be specifically pointed out that the industrial economy. In the words of a much debated new technologies tend to work in favour of increased recent study: "Manufacturing Matters", 4 i.e. a strong homogeneity of industrial production processes. manufacturing base will remain the backbone of Industrial equipment will become more similar across industrial development in the years to come. various branches (at least regarding components such as control units, design systems, etc.). This in turn has Nature of New Technologies significant implications for human resource development in general and training in particular (see For a term as broad as "new technologies" there is below). obviously no watertight definition available. What can be observed at present is that the international technology- In the developed countries and the most advanced driven competition has grown, development cycles of developing countries the introduction of new both new products and new processes have become technologies entails changes in many key parameters shorter and comparative advantages of both countries of industrial development with far-reaching and companies are subject to relentless change. In this repercussions on corporate strategies, structural overall process of industrial change some dramatic change, trade and investment patterns and overall technological