CHAPTER 4 Rising to the Challenge: Priorities for the Developing Countries and the International Development Community
The changes that will result from the new technologies described at this symposium will present a different face to different countries. Many countries simply do not have the minimum levels of capital, infrastructure, human resource capability, basic services, and technological awareness to benefit from the telecommunications/computer revolution over the short term. Many of these countries, however, are the very ones that will have to rely most on technology to relieve the pressures on their food supply, health and education services, and environment that will accompany the next doubling of the world's population. Ironically, while the rapid changes fostered by today's sophisticated telecommunications and computer technologies are likely to become reality-and many of them already are-those still required for survival remain on the drawing board. The international development community must, therefore, not abandon its efforts to assist these least-developed countries. The telecommunications/computer revolution may, in fact, have little to offer them.
For other countries, however, there are opportunities to grasp that would allow them to catch up-with the developed countries, with the world economy, with their own environmental remediation requirements, and with the demands of their own growing populations. But to succeed, they too will require some assistance in planning, some awareness-raising, and substantial changes for investments in economic growth.
This chapter seeks to identify some of the priorities, delimited by problem area, that will permit developing countries to accelerate the process of applying the new tools offered by the technology revolution. Most of these priorities must be implemented by the countries themselves, the private sector, and the scientific community. Others will be part of an international effort coordinated by development agencies and the World Bank. This chapter will conclude by examining the corresponding new roles for the cast of actors on the international stage.
The population pressures that will affect a significant number of the world's countries in the early twenty-first century give priority to issues of food security. The increases in crop and livestock production that will be required, estimated at greater than 100 percent over the next 40 years, will have to come mainly from gains in yields per hectare, mostly on land already under cultivation. This will require technological advances in agriculture that can be compared in scale and impact only to the green revolution of the 1960s-a revolution that was largely led by international research centers located in developing countries, funded by international organizations, developed countries, nongovernmental organizations, and host governments. But since the sixties the international political climate has changed. The global markets are no longer dominated by so few countries, and the private sector plays a greater role in research and development. Nevertheless, the remedy for projected food shortages remains the same: more technology.
Basically, three farm types are found in the tropics: the industrial-scale or plantation sector; integrated, multicrop farms; and the traditional farms, usually found in marginal-soil or low-resource areas. In general, private market incentives should suffice to spur growth in the commercial plantation sector. Thus efforts to promote increases in the food supply should focus on productivity and concentrate on the most competent, integrated, multicrop farms found in high-resource areas. New technologies must be introduced on these integrated farms; newly strengthened national research and educational institutions could help to develop or transfer the technology and support productivity gains. Such measures also might have an impact on the traditional sector if efforts are made to study and improve traditional crops and farming systems. Assuming the new technologies will be forthcoming, the key problem will be getting them into the hands and the minds of the farmers-technology transfer.
Market incentives for the adoption of biotechnology-generated products generally reach the plantation sector. But the integrated farm sector has less access to information and may be more conservative about new technologies, having less margin for survival. Promotion, demonstration, and extension may be essential to the further adoption of new cultivars and improved varieties. Investments in soil productivity enhancement, associated with crop rotations, conservation tillage practices, increased efficiencies of fertilizers and pesticides, and improved farming practices to avoid erosion and runoff, will provide major gains. For the traditional sector, scientific breakthroughs that might permit the cultivation of high-value commodities on marginal lands without unduly degrading the environment would make a major impact. This problem, however, holds little interest for the developed countries, where most biotechnology research is carried out. Solutions, then, should be pursued in national and regional agricultural and biotechnology research centers.
PRODUCTIVITY AND COMPETITIVENESS
It is in manufacturing and services that developing country firms perhaps have the best chance of using advanced technologies to propel them into equal participation in global markets. But two conditions must be satisfied for these firms to become integral parts of global integrated manufacturing networks: the developing country firms must be competitive in price, timeliness, and quality; and the policy environments of their countries must be conducive to global production.
The notion of “design-for-developing countries” will work if these countries are able to offer access to large or emerging markets, or to sources of materials that cannot be readily obtained elsewhere. For example, a developing country firm could introduce a product-such as an electric water pump designed for a consumer appliance-to a new market for use in tandem with a solar generator. Another firm might provide workers with a moderate level of education and skills at relatively lower wages. Or a firm might offer boutique manufacturing because it is small enough and flexible enough to custom manufacture on demand and in small quantities. Consideration of the new patterns in collaborative manufacturing will help to identify many opportunities for manufacturing enterprise development in developing countries.
In much of the developing world, the industrial sector is dominated by a few very large firms and a large number of cottage industries. Middle-sized companies that have the flexibility and capability to serve as reliable suppliers in a value chain are in short supply. For such countries to compete, new government-developed incentive programs could encourage the formation of such mid-sized firms to serve as a supplier base, thereby reducing imports of subassemblies and components. Proximity of suppliers is a valuable asset, as is the timely import of high-technology components such as displays or integrated circuits that are not manufactured locally. Similarly, a good transport infrastructure, including rapid customs services, is important. The establishment of industrial parks and duty-free zones would encourage participation in global networks.
For some countries, substantial changes in the domestic economic environment-such as low inflation, deregulation, and intellectual property rights protection-and a commitment to change by both the government and the private sector will be needed to create the climate for effective participation in global networks and markets. But any such changes should be undertaken as part of a vision of the future created and articulated by each country. All sectors-governmeet, private sector, universities, labor-should contribute to that effort and then identify and carry out the actions to achieve that vision. A mechanism useful for this purpose is a national government-university-industry roundtable at which government officials, business leaders, scientists and engineers, and economists exchange ideas and prepare a plan for public debate and government decision. Nongovernmental organizations, particularly trade associations and professional associations, also should play a part. The knowledge required for rational decision making in this area is not exclusively held by governments. The challenge presented by the technology revolution requires participation by all sectors of society.
Such a vision should be supported by a strategy to fulfil it. A country may decide to enter global manufacturing markets in areas where it has a comparative advantage by first offering peripheral components or services such as software, spare parts, field services, tools, or postharvest processing of agricultural products. These arrangements could be consolidated by license, joint ventures, foreign direct investments, or government-required offsets on other contracts. Such ventures will spin off knowledge of the technologies and of the international markets. Later, the country may wish to introduce products to local markets, enter into long-term partnerships with major international producers, or undertake complete product manufacture in competition with producers in other countries. Each country must be firmly aware of its own interests and recognize that no one gives away anything valuable. Today's technologies may be available for license, but only when tomorrow's are on the test bed.
Governments, in collaboration with the private sector, can take several kinds of actions to implement their visions. For example, in a competitive environment low-cost labor will by itself count for less, but a moderately low-wage yet educated and trainable work force may have a definite competitive advantage. Even so, the cost to a firm of training may offset low direct labor costs, and thus it may be advantageous for government to share training costs and to take measures to discourage the practice of one firm hijacking workers trained by other firms. Government also could create institutions that offer training in the management of technology, possibly following the model of the institute set up through joint U.S.-Chinese cooperation at Dalian. Other services that would assist local firms are: technology scanning and forecasting, technology demonstration and transfer institutes, trade shows, and technical information services linked to worldwide information networks. Information also might be distributed through the facilities of other public services, such as electricity and telephone, that reach most establishments.
Deregulation and the elimination of trade barriers are important steps along the path to competitiveness. New informatics technologies are, in any case, eroding the capability of regulatory agencies to control the service industries, or to prevent domestic services from being marginalized by international competitors. An example is modular telephones, which can undercut local telephone services and provide untaxed and unregulated international service as well. (In Chapter 2, however, this example is used positively-as a way developing countries can jump-start a telecommunications industry.) Obstacles to foreign direct investment and to high-technology imports can impede local participation in global markets. A closer look at the experience of the newly industrializing countries of Asia and Latin America would be useful. The World Bank and other neutral parties are ready to advise developing countries in the area of regulatory reform.
The success of many of the actions described here will depend on cooperation from the developed countries, from investors who see a profit in working in the developing countries, from manufacturers seeking partners, and from scientists and engineers who can provide valuable advice. Communication among all these players is essential, and this too could be facilitated by modern informatics technology. On an Internet bulletin board, questions can be posted and answers returned, and third parties can comment on both the questions and the answers. A bulletin board devoted to the technological aspects of development could serve as a forum for questions from developing countries on technological opportunities and answers from investors, potential partners, and scientists and engineers, with commentary from the World Bank and other international monitors. This initiative would cost virtually nothing and could be either informal and open to the public or restricted to a defined group.
ENVIRONMENTAL AND ENERGY TECHNOLOGIES
Technology will contribute in different ways in the environmental arena. Pollution and resource depletion, the two faces of environmental destruction, may find some sources of remediation among the emerging technologies. New techniques for bioremediation can clean up some of the damage to fragile environments, such as oil spills or heavy metal contamination. Similarly, other technologies, developed in the West in response to public agitation over hazardous waste sites and industrial pollution, can reduce the emissions and clean the effluent from industrial plants. These technologies can be licensed and applied in developing countries before extensive damage has been done.
Energy generation and use are a major source of pollution, but many new and emerging technologies for efficient, cleaner electricity generation are available and well suited to developing countries. In fact, this is a good time for developing countries to add new, more efficient low-emission technologies to their capital stock while per capita demands are still low. Based on current demand projections, in 20 years the developing countries will require a tenfold increase in generating capacity as well as end-use equipment. Fortunately, these countries are in a position to leapfrog to a new generation of technologies that is far more efficient, less costly, and less polluting than was historically available to the industrial countries, even at a far more advanced state of development. The result will be an approach from below to the present-day optimal level of energy use per capita for the given size of an economy, instead of the path of expensive retrofitting required in many developed countries.
During the oil crisis of the seventies, many international organizations and bilateral donor agencies undertook extensive energy planning, assessments, and research programs. Today's situation may be just as critical in the long run. Many countries, finding themselves undercapitalized in the energy sector and with growing demand, are making key decisions that will affect the economy and the environment for a long time. The issue this time is not so much the choice of fuel-although there are still choices to be made among fossil fuels, renewables, and nuclear-than that of generating and end-use technologies and their relative benefits in terms of high efficiency, decentralization, and pollution control. The scientific community, supported by donor and development organizations, should take the lead in providing good offices and advice for these important decisions.
The great importance of macroeconomic stability, of pricing and tax policies based on economic principles, and of a satisfactory regulatory framework for investment, is well known. Government must play a key role in sending consumers the right signals and enabling markets to function efficiently. This role should embrace such approaches as (1) setting standards and codes (for example, for the performance of buildings, appliances, and equipment); (2) monitoring pollution, establishing environmental standards, and introducing environmental taxes, laws, and regulations (such as for phasing lead out of gasoline); (3) attending to property rights issues, which can be important for the design of environmental policy (rights of the polluting and the polluted parties) as well as for investment; (4) providing investment incentives for the adoption of new and innovative technologies; and (5) providing for the sharing of risks, especially important in countries with undeveloped capital and insurance markets.
RESEARCH AND DEVELOPMENT
The research and development community has brought the world the computer/telecommunications, materials, and biotechnology revolutions. A creative partnership of the public and private sectors in the Western countries and Japan produced most of the new technologies discussed in this proceedings and is in the process of changing the world. One would not assume that the research and development system needs any remediation, but in many sectors it is not, in fact, providing the innovations and discoveries required for the problems of most importance to developing countries. Most fundamental research is done in and by the developed countries, and much of the applied and developmental research is carried out with their large and affluent markets in mind. The needs of the poorest countries or of some tropical countries-especially in agriculture, health, education, and the environment-often are not considered. This is in a sense a “market failure” in research and development, and some “intervention” may be necessary.
The most successful model for research and development for the benefit of the developing countries is the system of research laboratories of the Consultative Group for International Agricultural Research (CGIAR). These laboratories, most located in developing countries, specialize in corn and wheat (Mexico), rice (Philippines and Liberia), forestry (Kenya and Indonesia), livestock (Ethiopia and Kenya), insect physiology and ecology (Kenya), tropical grains and legumes (Colombia and Nigeria), arid-zone agriculture (India and Syria), potatoes (Peru), training (Netherlands), food policy (United States), and other areas of agricultural research. Their successes stem from their concentration of scientific resources, including the skills of researchers from all countries, on local problems in the developing countries. Some of their weaknesses have been related to difficulties in disseminating and communicating their findings. The lessons revealed by several assessments of the CGIAR research network should be studied with care before the model is copied or expanded.
Other areas that could benefit from regional centers of excellence in research and development are: health research, with a concentration on vaccine development, contraceptive technologies, and tropical diseases, as well as the capability to track emerging diseases and drug resistance; energy research, with an emphasis on adapting renewable source technologies to local conditions; environmental research, to understand and minimize the impact of agriculture on the tropical environment; and education, with a focus on technologies for mass education in poor countries. The new centers of excellence could be built on existing research centers-either national research institutes, which exist in many countries, or the CGIAR research centers. They would offer professional training to developing country researchers and an environment that would attract distinguished researchers from both developing and developed countries for limited stays. Research in the social and behavioral sciences should be included in the programs of these centers.
The proposed centers might differ from the centers of the CGIAR system, established in the 1960s, by utilizing telecommunications and computer technologies to involve the private sector and a wide spectrum of scientists working in their own laboratories. This different kind of international research network, appropriate to the 1990s and into the next century, should be explored thoroughly by the scientific and donor communities.
Many developing countries have been sending scientists, engineers, and other professionals overseas for training for decades; China now has more Ph.D.s than England, France, Germany, and Japan. Some say, however, that these developing country professionals are not yet producing up to expectations. A similar situation occurred before World War II when the United States had more scientists than Europe, but they too were not making a great impact. The war focused the efforts of the Americans, and a radical but more benign upheaval might serve to energize the scientific elites of the developing world in a similar way. The stimulus could be provided by modern information-computer-telecommunications technology, coordinated by regional centers of excellence to give these scientists access to up-to-date technical information and publications and allow them to communicate easily with their colleagues around the world. These scientists might, then, provide the leadership needed to bring their countries into the technological mainstream.
The developments suggested here will not come to pass unless all sectors of the world community do their part. The challenge of marshaling technology for development will require new roles for governments, the private sector, research and scientific institutions, and the World Bank and the development community at large. These new challenges are described in the rest of this chapter.
Scientific and Research Community
. Put technology issues at the forefront of individual country development assistance strategies. Help the least-developed countries adapt to the changes brought on by the new telecommunications and computer technologies.
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