Technology and Development

The poorest people in the world depend on hunting and gathering and subsistence agriculture for their living. These folk have to work so hard to supply the bare necessities of life that they have little opportunity to do anything else. Historically, economic development has depended on increasing labor productivity in agriculture, thereby releasing labor for other economic functions. It is only when a few can produce all the food and fiber required by the nation that the many can go on to manufacturing and services.

What are the technologies that increase labor productivity in agriculture? Substituting high productivity crops and livestock for low productivity is an important step. That is why the Colombian Exchange was so important to economic development. Then improved crop cultivars and improved livestock breeds are vital. Better tilling procedures and irrigation play important roles. So too do agricultural chemicals -- fertilizers, weed killers and insecticides. Better tools and machines play a part, increasingly important as farms get bigger and mechanization becomes more necessary to allow a smaller agricultural workforce to tend the land and the increased per capita production. Then comes better storage, improved food processing and better distribution.

When I was a Peace Corps volunteer in Chile, decades ago, I helped build a house for a man who had lost his in an earthquake. The house was a prefab, and we worked with simple tools -- hammers, saws, shovels, etc. Given the manufacturing that had gone into the framing we used, we were able to build a substantial house rather quickly. It had been designed to withstand the earthquakes that would surely hit Chile in the future. If I compare that to the totally prefab houses that are used here after disasters, or if I compare our productivity to that of housing construction workers in the United States today, I am impressed by the way technology development can increase productivity in housing -- building bigger and better houses more efficiently.

We tend to forget how much piped potable water, electricity and sewerage have contributed to economic efficiency. These technologies were widely disseminated in the developed world in the 18th century -- electrification in the early 20th. Still, many poor people around the world still lack piped water, sewerage and electrification. Cell phones apparently are overcoming the barrier to telecommunications even for the poor.

The industrial revolution was largely based on the substitution of mechanized factory production for cottage production, a substitution that involved radical technological transformation of the production process. The technology of manufacturing has continued to evolve. While clothing manufacturing still involves a lot of labor, many new products -- chemicals, electronics, capital goods -- are produced in highly automated factories. Developing nations are still in the process of adopting and adapting these productive technologies.

Historically, development has been a shift from economies based on primary production (fishing, mining and forestry -- which have also undergone technological revolutions -- as well as agriculture) to those based on manufacturing, and now to those emphasizing services (e.g. financial services, education, health services). The revolution in information and communications technologies is also revolutionizing these service industries, both making new services possible and changing the way previously existing services are now produced. Indeed, these ICTs are revolutionizing the way companies are managed and the way in which markets and other economic institutions function.

Today I heard a conversation in which the term "technology" was used in the limited context of the changes in social networking coming about due to the penetration of smart phones in developing countries. That is an important new element in economic development, but it is far from what I regard to be the continuing need for technology invention, transfer and innovation to promote economic development.