Arguments for the Generation of Technology by Less-Developed Countries

Abstract

This article considers whether LDCs should try to develop their own technological capacity rather than continue to rely on developed countries for their technology. The developed countries at present have a comparative advantage in the production of technology. They have the specialized resources of manpower and physical equipment as well as considerable experience. It is therefore likely to be cheaper for developing countries to buy their technology from developed countries. But there are three reasons why developing countries should nonetheless try to develop their own technological capacity. First, local technological capacity is necessary to adapt imported technology to local conditions so that it becomes more efficient in use. Second, technology imported from industrialized countries is often inappropriate for the different conditions in less-developed countries (LDCs). The imported technology tends to be capital-intensive and large scale and often produces oversophisticated high income products. LDCs need their own technological capacity to develop more appropriate technologies. Third, total technological dependence is a major factor behind the generally dependent relationship that many countries experience vis-a-vis industrial countries. Without independent technological capacity, the technological dependence and the more general dependent relationship is likely to be perpetuated.