The Global Generation, Transmission, and Diffusion of Knowledge: How Can the Developing Countries Benefit?
It is by now almost a mantra that the human species has reached a stage in its trajectory in which information, or more broadly knowledge, has become the new leitmotif and organizing principle of society, much in the same way that energy was for the industrial revolution. (When feasible, the terms knowledge and information are used interchangeably in this paper, although, strictly speaking, knowledge connotes more than quantifiable information; it involves awareness, insight, and the power of discernment.)
Information and learning-the process by which information is received and absorbed to become knowledge-have guided human actions from the beginning. But it was only until well into this century that engineers and scientists were able to define information as the removal of uncertainty, to measure it precisely, and to create devices to transmit, store, and manipulate it at unprecedented rates and over great distances. Furthermore, society has recognized the utility of information and has developed major economic activities based on it, as well as greatly enhanced people's capacity to generate information through research. But the very existence of the developing countries indicates just how much knowledge the world still needs to narrow the gap between these nations and the developed countries. The task of the developed countries in achieving this is even more daunting than that of the developing countries because the consumption patterns of the industrial nations cannot be used as a model for the rest of the world.
THE GENERATION, TRANSMISSION, AND DIFFUSION OF KNOWLEDGE
Every day some new knowledge is generated-for example, about nature, about how to create and use artifacts, about society itself-dispelling some uncertainties. At the same time, every day new uncertainties demand the generation of new knowledge. Thus findings about the existence of genes and their role in the replication of life raise a host of new questions: from how humans fit into the evolution of life, to the role of specific genes, to how genes can be altered to fight specific diseases and used to modify living organisms so that they better respond to human needs.
Today, it is impossible to quantify how much knowledge is being generated worldwide. Nor is it possible to know the extent of ignorance and of the unknown-of that infinite reservoir from which information is extracted and knowledge is shaped. More is known about certain kinds of knowledge, however, such as that of science and technology. For example, one can count the number of articles, books, patents, and the like in which portions of that knowledge are contained. (Other portions directly embedded in products or know-how are often harder to assess.) Another indirect measure for which rather precise information exists is the number and training level of knowledge personnel, such as researchers with doctorates.
As the end of this century nears, it is obvious that, in spite of many advances in knowledge, society still faces enormous uncertainties and ignorance in areas of immediate relevance to its well-being. Not only is it far from understanding many natural, social, and economic phenomena, but it also is far from knowing how to act on the basis of the knowledge and information it possesses. It does not know, for example, how to successfully educate all of the world population to respond to what is known about health and demography or natural hazards, or how to eliminate poverty.
Some of the impediments to dealing with these problems are in the social domain, while others are intrinsic to the genetic heritage of the human species, a heritage that is just beginning to be understood. But regardless of whether the necessary information is social, psychological, or genetic, one cannot act intelligently without it. This is a universal problem-for people, for organizations, and for countries, whether developed or developing.
The World Knowledge Infrastructure
The world knowledge infrastructure-the complex of systems for the generation, transmission, and utilization of knowledge-is large, ill-defined, and still in its infancy. Moreover, its growth has not followed a master plan; it often has occurred by the opportunistic aggregation of many elements, as in the case of many telephone networks. Nevertheless, some of the instruments needed to comprehend and envision ways to coordinate this infrastructure are now available.
For the generation of knowledge, or, in a narrow sense, the extraction of information from natural or human-made events and environments, the predominant organized players today are researchers and research institutions. The knowledge these players acquire is generally recorded and transmitted, albeit not universally received. Indirect measures of its magnitude show it is growing exponentially. In addition, a vast if poorly tapped body of valuable knowledge is being generated outside the research laboratories, by experience, by trial and error, or by chance. This largely grass-roots knowledge is recorded far less systematically, if at all; is transmitted haphazardly; and is impossible to measure even indirectly.
The instruments for the transmission of knowledge are myriad, ranging from schools, books, newspapers, and data banks to professional and scientific societies, conventions, information “highways” and postal systems, financial institutions, trade, technology transfer activities, and personnel exchanges. The International Congress of Scientific Unions (ICSU), with its well over 1,000 affiliated organizations from about 150 countries, exemplifies the global reach of these transmission instruments.
The World Wide Web (WWW), which encompasses the totality of network-accessible information, is another important and rapidly growing embodiment of human knowledge¹. For developing countries, the Web, by exploiting the results of international collaboration, is an extremely important tool that gives them access to all kinds of information. Because it is “transparent” (democratic), modular, and accessible, the Web can enable a developing country to form its own network of information and make that information available to other developing countries and the rest of the world-and vice versa. But to benefit fully from the Web, a developing country must have in place the appropriate information infrastructure with channels of high bandwidth.
An increasingly promising aspect of the transmission of knowledge is the opportunity to use advanced telecommunications to operate laboratories and other research facilities at a distance-and eventually also to perform medical procedures. This not only can offer major savings to developing and developed countries alike, but it also can help scientists, engineers, and medical doctors from developing countries to work at the cutting edge of science, technology, and medicine. In industry, offices working in real time on the same problem or set of drawings in several locations that may be continents apart are already a reality.
Finally, the utilization of knowledge-putting knowledge to practical use - can involve potentially everyone everywhere. But to be effective, this again requires organizations and individuals capable and willing to act.
An integrated view of the generation, transmission, and utilization of knowledge-that is, the path from knowledge to action-should take into account the three distinctive interacting levels at which this process operates. At the top level are the international networks, agencies, and organizations that are primarily global transmitters of knowledge, such as the International Council of Scientific Unions (ICSU). Also at this level are found the international research institutes - such as the Consultative Group on International Agricultural Research (CGIAR) institutions that spearheaded the green revolution and the European Organization for Nuclear Research (CERN)-which will become even more important as individual countries find major research facilities increasingly unaffordable.
The mid, or country, level is where traditionally most scientific and technological knowledge has been generated-by universities, industries, and other institutions of a country. Transnational corporations reside at this level as well. Like many other institutions at this level, these corporations rely on the international networks of the first level for the transmission of information, and increasingly they also rely on their own secure point-to-point communications, bypassing public networks.
The lowest level is that of the grass-roots - individuals - where large amounts of knowledge are both generated and received. Pinpoint transmission of this knowledge among individuals is being enormously facilitated on a global scale by access to the networks of the top level. But because so much is now being received and generated at the grass-roots, people will require filters to reduce overload and to help to assess what is valid and essential. This is a particularly serious problem for developing countries. Markets, which are among the most effective instruments for the transmission of information, also operate at the grass-roots level.
The distinctions among the generation, diffusion, and utilization of knowledge are not sharp because the generators of knowledge also transmit knowledge (as in the case of World Wide Web, which was developed by CERN); the transmitters also utilize knowledge; and the utilizers can in turn generate additional knowledge. In spite of their academic tinge, the distinctions are useful, however, in helping to understand the workings, as well as the pathologies, of the knowledge infrastructure. Indeed, eventually they may help to determine the efficiency of the knowledge process-that is, the fraction of knowledge generated that is actually utilized.
For the three levels at which the knowledge process operates, the fundamental question is to what extent should a country or an institution contain the process at one level. For example, should the standards that guide the process be local or global? Should doctors and engineers be licensed to practice locally-or globally throughout the reach of international networks? Should a country developing a financial market think locally or globally? Similarly, should the language of instruction-that is, the communication of knowledge-be the local one or a world language? In each case the answers demand that one balance realism and a sense of vision and opportunity. But just one of many historical examples shows how difficult this is to achieve: the desperate and largely unsuccessful struggle of some of the rulers of the Ottoman Empire in 1800 to bring their institutions to a more modern international standard.² Current examples are the reluctance of some countries and institutions to linkup to the Internet, and the difficulties in reaching a consensus on how to achieve sustainable development.
How Does the Knowledge Infrastructure Actually Work?
The workings of the world knowledge infrastructure are still far from being well understood. Even in the absence of specific data, however, it is evident that much knowledge is not acted on for several reasons. First, only rarely is knowledge conveyed from generation to utilization through a direct pipeline. Much more often it is conveyed by a kind of general diffusion process, and usually only specialized gatherers, such as researchers or intelligence agencies, can harvest it effectively.
Second, the feedback from the users of knowledge (the entities and individuals that transform it into action) to the generators has not worked very effectively. Thus developing countries often receive knowledge that the industrialized world believes they should have, although it is not necessarily the kind of knowledge that the developing countries feel they need. This can be as much perception as reality, but the perception has led to accusations of cultural imperialism, and the reality has led to serious mistakes, such as the building of the ill-advised Artibonite dam in Haiti in the late 1950s. Today's worldwide information structure, made possible by advanced telecommunications, allows the feedback from need to generation of knowledge to be much faster and more effective. Furthermore, that feedback could operate more and more in both directions because the developing countries possess important elements of knowledge (such as native curative remedies and alternative medicine) that are in demand by developed countries.
Finally, many entities (such as countries, agencies, and individual companies) do not possess the mechanisms needed to receive information or sufficient information to act, or, even if well informed, they are not always capable of acting. Although this is particularly true for many developing countries, some industrial giants in developed countries have suffered grievously from some of the same failings.
On a global scale, the knowledge process has been successful in certain areas but not universally (Table 1). It has helped to contain some infectious diseases, to spread scientific and technical knowledge, and to create worldwide markets. But the process has worked at best only partially in the eradication of hunger and poverty and in the development of population policies, and it has worked very poorly in the avoidance of regional conflicts and genocide and in the preservation of ecosystems.
The Need for a Global Knowledge Strategy
The challenge is how to increase the effectiveness of the knowledge process-its ability to do what it is intended to do with as much economy of means as possible. This difficult goal cannot be achieved without a global knowledge strategy. But in spite of the work of many international agencies and the worldwide expansion of telecommunications and information, that strategy does not yet exist.
TABLE 1 The Information Infrastructure-Health Issues
NOTE: LDC = less-developed country.
A global knowledge strategy should respond to two fundamental sets of questions:
In the context of these questions, the developing countries want to know not only how to implement long-term, fundamental changes, but also how to address immediate, down-to-earth concerns. For example, how can they initiate manufacturing activities even before the existence of a sufficient indigenous force of engineers? Or how can they improve agricultural production or health care before there are adequate laboratories or agricultural and medical schools? A series of pertinent and very specific considerations-both short and long term-are examined in the rest of this paper. Such an examination, however, cannot lose sight of the global context. If the human race is to have a future, the global improvement of economic and social conditions through better knowledge is imperative. This is a problem that both developing and developed countries must address jointly. It simply does the world no good in the long run if individual countries succeed in addressing their socioeconomic problems at the cost of neglecting such global problems as the growing depletion of the ecosphere or the potential for international conflict.
THE IMPORTANCE OF TECHNOLOGICAL INNOVATION TO THE WORLD ECONOMY
Of the many facets of the process through which knowledge is generated, transmitted, and used, technological innovation is by far the most significant for the world economy. In his 1885 presidential address to the British Association for the Advancement of Science, Sir Lyon Playfair observed,
France and Germany are fully aware that science is the source of wealth and power and that the only way of advancing it is to encourage universities to make researches and to spread existing knowledge through the community.... Switzerland contains neither coal nor the ordinary raw material of industry, and is separated from other countries that might supply them by mountain barrier. Yet, by a singular good system of graded schools, and by the great technical college of Zurich, she has become a prosperous manufacturing country.... The wealthy universities of Oxford and Cambridge are gradually constructing laboratories for science.³
Just about at the same time, German industry had been able to overtake that of France in the development of artificial coloring substances (Figure 1) - a dramatic demonstration of the impact of systematic research conducted in dedicated laboratories with full-time researchers. Such an example shows how relatively recent is a clear understanding of the importance of technological innovation to modern economies. Major technological innovations, however, have had a revolutionary impact on the world economy, directly or indirectly, throughout history-for example, the impact of scientific navigation initiated by Henry the Navigator in Portugal in the fifteenth century, or that of firearms and of the railroad. These impacts changed not only regional and national economies and global trade patterns, but also military and political balances and, in turn, the world economy. Examples abound. In the ancient world, an innovative naval technology enabled the Romans to defeat the Carthaginians, and such uncontested power made possible several centuries of peace and economic development in the Mediterranean region.
Today, the importance of technological innovation to the world economy is even greater. For the first time in history, the world has acquired the capacity to feed all its inhabitants, even if, paradoxically, for a variety of complex sociopolitical reasons, hunger still stalks the planet. And for the first time in history, thanks to technology, people have the potential to communicate with each other across the globe, to participate in a global marketplace, and to create a global “hyperintelligence” that could help to stem irresponsible population growth and enhance the prospects of the human race. 4 If the green revolution was a technological fix-one that will need to be performed over and over until population growth is brought under control-hyperintelligence represents a fundamental expansion of the social intelligence of the human species.
As economies have advanced, it has become increasingly clear that technological innovation, fueled by research and the generation of new knowledge, is now the major factor in increases in productivity and the sine qua non to guarantee a prosperous future. The enhanced ability to exchange information and transfer technologies will enable even the poorest developing countries to participate in the advances-not only economic but also social-made possible by technology. For example, the immense pain and inefficiencies associated with poor health could be reduced by a worldwide system of health care fostered by telecommunications advances. But the economic and social advances brought about by technology are not painless or without cost.
HOW DOES TECHNOLOGICAL CHANGE HAPPEN?
Technological change is a complex process. In the simplest terms, as for the airplane, radio, and nuclear weapons, curiosity or desire create a need; a need - or at times serendipity-creates an invention; and an invention creates a new technology. The new technology, if successful and useful, diffuses and overtakes the existing technologies-just as the railroads overtook canal transportation and motor vehicles and aviation overtook railroads. Eventually (and today very rapidly), the new technology is likely to spread through trade, the exchange of information, deliberate technology transfer, conquest (as in the case of the Mongols, who transferred knowledge and technology between East and West), or espionage.
The acquisition of new technologies does not occur, however, without a system in place that is intrinsically receptive or capable of being made receptive to innovation-for example, the Europe of the Renaissance. 5 At times, a system is forced to be receptive such as in the Russia of Peter the Great and later of Lenin and Stalin. Today, the existence of a national or international system of innovation is recognized to be a key factor in technological advances. 6 Among the many conditions that make a system receptive to inventions and innovations, investment in the scientific and technological infrastructure and associated human resources is paramount. But because many developing countries lack such an infrastructure, they must try to operate with what they have, while patiently and systematically developing the components of the technological infrastructure required to advance.
An effective technological infrastructure enables a country to generate and utilize knowledge. It includes an educational system that encourages creativity and the pursuit of scientific and technological knowledge at all levels; an educated and skilled work force; a network of outstanding research laboratories; measures and standards laboratories; critical machine shops; linkages between researchers or inventors and the potential utilizers of the knowledge they generate; a legal system to protect technological innovation, whether indigenous or imported; a financial system to invest in innovations; a fiscal system to encourage innovation; and a general population that is technologically literate and receptive to innovation.
The last factor is often not given enough weight, yet history has proven its importance. In the second half of the eighteenth century, the Encyclopédie of Diderot and d'Alembert provided an increasingly interested general public with a vast array of technical and scientific information. From the seventeenth to nineteenth century, the ingenuity of a number of American inventors, who though often not formally educated were technologically literate and operated in a very receptive milieu, provided the new country with a variety of important technologies, from gin mills, firearms, steamboats, and bridges, to Henry Ford's automobiles and the Wright brothers' airplanes. In Japan, from 1853 to the battle of Tsushima in 1905, the transformation from a feudal technology to a very advanced modern technological level stemmed largely from a disciplined, educated work force that was open, as it continues to be today, to technological innovation.
Among many developing countries, particularly the poorer ones, widespread technological interest has yet to emerge, hindering in many ways the process of technological development that has been so successful in Europe, America, Japan, and parts of Asia. If technological innovations are to occur, those developing countries must emphasize technological literacy in schools and encourage it among the entire population.
Three other factors also are essential to innovation. First, leaders must be well educated and seriously convinced of the importance of technological innovation. And they must be prepared to act. Undoubtedly, one of the factors contributing to the success of Taiwan in recent years is the number of Ph.D.s in leadership positions, including current cabinet members and the prime minister.
Second, research laboratories must focus on the needs of the country. For a developing country this means a strong emphasis on applied research and development, but windows on basic science, by maintaining a core of basic researchers who can follow and participate in world advances in science, are very important and should not be overlooked. Research laboratories and universities also should avoid excessive compartmentalization. The scientific, technological, and social challenges of the developing countries, like those of the rest of the world, require interdisciplinary interaction: materials engineering needs to interact with biology, computer science with linguistics, medicine with sociology, engineering with economics and the law, and so on.
Third, developing countries need to pool their scientific, technological, and educational resources with those of neighboring countries to create critical masses of resources that are beyond the capabilities of individual countries. Europe has been doing this with considerable success, as exemplified by the Concorde, the Airbus, its space program, and a large number of European Union programs, from Eureka to Erasmus, that encourage intra-Union cooperative science and technology projects. Most developing countries, of course, are still a long way from being able to emulate these programs, but they would greatly benefit from regional technological cooperation. If that cooperation is pursued judiciously, starting with specific projects and extending to joint technological and industrial policies, its benefits are bound to far outweigh those of competition among neigh-bors. But participants in such arrangements must guard against two traditional dangers: the possibility that a regional center will siphon off scarce talent from the participating countries, and the tendency of a center to serve best the needs of the country in which it is located. Here again technology can help by making possible the creation of “distributed” or “virtual” centers, most of whose personnel are located in their own countries. The Third World Academy is attempting to overcome the subcritical mass of outstanding scientists in most developing countries by operating as an academy of sciences for all of the Third World.
THE COMMERCIALIZATION AND GLOBALIZATION OF INNOVATION
Some innovations that fill in very obvious needs-such as the radio, automobile, airplane, bicycle, television, or x-rays - become easily commercialized and spread globally. Even so, there are almost always struggles. Radio was not developed in the country where it was invented; the significance of airplanes as transports or offensive weapons was not envisioned at the beginning; the naval screw propeller took a long time to prevail over paddle wheels. Thus often even the most useful technological innovations have to overcome the hold of conservative older technologies. Innovations that do not respond to an obviously perceived need or desire, such as the Walkman, require even greater foresight and perseverance in their commercialization. And then, of course, there are those innovations such as nuclear weapons that one struggles not to see globalized.
Each element of the relation technology-products and production-market (TPPM) plays an important role in the commercialization and globalization of technological innovation. But, unfortunately, many developing countries, in addition to being intrinsically weak in technology, are unrealistic in the selection of marketable products, inefficient in their production, and naive in marketing. In addressing these problems, a developing country, like any other country, must consider a number of issues that go well beyond the category of “technology transfer.” Indeed, technology transfer is only one of the instruments required by a national system of innovation-a system that needs to look just as much inward for innovation as outward. Altogether, these instruments must include or consider:
Joint ventures or other arrangements could further extend the technological observatory concept, and the possibilities are intriguing, even if untested. Indonesia, for example, is investing in an advanced production facility in a technologically advanced country to serve as a training ground for developing country personnel, as an originator of new designs that bring together the experience of both countries, as a technological observatory, and as a port of entry into the global market.
As for the importance of the private sector, over the past decade six out of seven new jobs in the United States have been generated in the this sector. Moreover, the rate of job creation in the United States has been higher than in Europe, where the majority of jobs has been generated in the public sector. 8 To achieve a high rate of job creation, the developing countries may need to enact policies that enhance the dynamism of their economies, more than emphasizing only job preservation and creation. This is the kind of hard-won knowledge that can help to guide the strategies of the developing countries. Information from both developed and developing countries and candid appraisals of the results of different policies can enhance the knowledge of how the latter can generate jobs and balance economic objectives with social compassion and environmental preservation. This is a particularly complex challenge for developing countries because with their widespread poverty they cannot adopt uncritically economic development measures that might place their citizens at even greater risk.
But such percentages do not mean that the world will not continue to need the many basic products below the simplicity threshold. Rather, it means that to advance, a developing country must find ways to add value to those products and should not rely exclusively on them. The move from simpler products and processes, including services, to more complex ones depends critically on knowledge and on the ability to create learning environments. In these new organizational environments, the acquisition of knowledge and feedback from experience are viewed as the sine qua non for survival and progress. But their creation will require profound transformations of often ossified or ignorant bureaucracies.
In endeavoring to pass over the simplicity threshold, a number of former developing countries, including Taiwan, Korea, Singapore, and Malaysia, have succeeded in going down the path from selling foreign products internally to manufacturing parts for those products, to manufacturing the entire product. In the future, however, that path is not likely to be as linear as in the past. The industry of a developing country will have to learn not only how to supply parts and components to companies abroad, but also how to master in turn the out-sourcing process by integrating products and services acquired from abroad. Furthermore, if a country has a large cadre of well-educated specialists, it also can supply the world market with advanced labor. For example, today India, Pakistan, and Russia provide software and software designers for American and European companies, an activity greatly enhanced by telecommunications.
During its development, Japan followed a different, less common, and ultimately, in terms of an open global economy, a less desirable path by typically importing a prototype or concept, followed by retroengineering and full-scale, continually improved product manufacturing. This was possible only because Japan had a highly skilled technical work force and strong protectionist policies. It was facilitated by a large internal market that could subsidize exports through higher internal prices and could absorb the initial run of products so that they could be tested before reaching the world market. The size, current or potential, of the internal market is always a most important strategic determinant, regardless of the industrial strategy adopted. Thus Indonesia, with a population of 200 million and a rapidly advancing-even if still extremely low-gross national product (GNP) would follow a strategy quite different from that of Cuba.
POSITIVE AND NEGATIVE EFFECTS OF TECHNOLOGICAL INNOVATION ON DEVELOPING COUNTRIES
Technological innovation has a tremendous impact on developing countries-on their agricultural production, health care systems, education, and work habits. These impacts in turn greatly affect family size, urban migration, everyday life, the condition of women, and other social concerns. For example, although improved conditions for women are, in general, still much too slow in coming, women are training to be astronauts in Indonesia, studying engineering in Libya, and holding increasing numbers of professional positions in many developing countries. The close correlations observed between higher literacy rates and lower fertility rates also are remarkable. 10
The political impacts of technological innovation have been equally significant. Telecommunications helped the coming to power of the Ayatollah Khomeini in Iran and the development of political consciousness in disenfranchised populations. The dismantling of the Soviet Union in 1991 was triggered by an increasing inability to compete technologically with economies that had reaped the benefits of advanced systems of innovation.
Different developing countries with differing value systems will inevitably see these impacts in different lights, but the impacts cannot be ignored. The inescapable fact is that the introduction of new technologies brings with it irreversible social and political change. Once some technological innovations are introduced, and with them a glimmer of a different future, a country, for better or for worse, is never going to be the same. Even strong authoritarian regimes (such as China or the former Soviet Union) cannot stop the process of change.
Some of the impacts of new technologies can be negative. When they occur, such impacts must be recognized and mitigated, even if they are often hard to foresee and even harder to modify. This is the responsibility not only of the developing countries, which can be easily tempted to accept new technologies uncritically, but also-and above all-of the developed countries.
One negative impact might be loss of local economic autonomy. In a region producing for the world market, fluctuations in that market or competition from other regions can be devastating. Thus it is imperative that a developing nation differentiate its products from others, as well as seek efficiency, quality, higher value added, and regional cooperation. Technological innovations that render the industrial products of a particular developing country obsolete can come on the scene very rapidly. The market also can be capricious, as in the case of fashion, or affected by new concerns, as in the case of the environment. These are all factors that can put at risk a country that does not try to anticipate change, or that relies too much on an economy based on few products.
Yet another negative impact is an extraordinary dependence on supplies from other parts of the world such as fuel, machinery, information, and personnel. The effects of the recent embargoes on Haiti and the isolation of Cuba are examples of how desperate the situation can become when those supplies cease to be available. And in Africa, the Sahel suffered widespread devastation when fuel became scarce and prohibitively expensive. Of course, no country in the world can be an island unto itself, but developing countries with limited resources are particularly vulnerable.
Increased use of resources-an inevitable correlate of economic development-leads to environmental depletion and increased pollution and waste. The tragedy of many developing countries is the merciless exploitation, borne out of desperation, of their natural resources and the devastation of their environments. Abundant, inexpensive labor should make it possible to create new, appealing environments offering a refreshing contrast to those of highly industrialized countries. This potential advantage should not be lost if a developing country is to provide a higher quality of life for its citizens and if it seeks to attract tourism as well as commercial, service, and industrial nonpolluting operations from developed countries.
Unrealistic expectations and aggravated internal inequalities also are negative side effects of technological innovation. Once a country embarks on the path toward technological development, the expectations of its population almost inevitably exceed the ability of the country to bring social and economic advances to all segments of its population. The result is the potential for unrest and the persistence of poverty in many regions. For example, from 1980 to 1990 in Latin America, families in poverty (defined as the percentage of people lacking the income for a minimum level of food, shelter, health, and educational services) increased from 35 to 39 percent. Poverty is projected to remain at the 38 percent level to the year 2000, in spite of positive increases in the gross domestic product (GDP) from the late eighties to today. 11 In China, the economic quasi-laissezfaire policy of the government has encouraged a great deal of technological and economic development, but at the price of great imbalances in the affluence of different segments of the population. Even in Europe and the United States, these imbalances have been very hard to overcome. The fact is that in a world society in which the traditional source of employment for the uneducated - manufacturing - is becoming highly specialized, the key to social and economic advances is knowledge. Thus inequalities in access to information networks and in the ability to use information are particularly serious and must become a major concern of the developing countries and the rest of the international community alike.
The breakup of traditional culture is perhaps the most distressful aspect of technological change since such change can have a much greater impact on developing countries than on most developed countries, where the changes have occurred more gradually and are much more the result of indigenous technological developments. In a developing country, technological change arrives almost by definition from the outside world in the form of full-fledged products that sweep the country without giving social structures and mores sufficient time to adapt. Thus the developing countries need assistance in fortifying key elements of their culture before they are irretrievably swept away to the loss not only of the developing countries but also of the rest of the world.
FORECASTING AND ASSESSMENT IN INVESTMENT DECISIONS
The fundamental question when making an investment decision is: Will the investment achieve its goal? Difficult for any country, this question is particularly so for a developing country that is unlikely to have sophisticated mechanisms for assessing risks and benefits. In any major investment and borrowing decision, a developing nation may place at risk its very future.
Risk is a multifaceted sociotechnological problem. Some risks are purely technological-for example, an intensive irrigation project may cause salination of the soil or saltwater intrusions in the water table, a reservoir may become silted too rapidly, or a new industry may turn out to be technologically noncompetitive.
Financial risks could take the form of an investment that may not be repaid, or the rate of return fixed at the outset may become less desirable over time than alternate investment opportunities. Moreover, a recipient country may continue to borrow from other sources and accumulate an irrationally structured debt that is hard to assess but a serious risk.
There also are the social risks that a project (or the fiscal conditions associated with its financing) may turn out to be counterproductive. For example, the required fiscal discipline may place the leadership of a country in an impossible position and cause drastic political changes (which has happened repeatedly in South America). Or the productive capacity may shift counterproductively from the countryside to the cities. The associated increase in urban population entails all kinds of risks: invasion of fertile land (as in Cairo), greater exposure of large population conglomerates to disease and natural hazards such as floods or earthquakes (but also to better educational and economic opportunities), changes in the social support system from extended to nuclear families, crime, irreducible poverty, and greater opportunity for social upheavals. Because these kinds of risks are so difficult to assess, some international assistance agencies have simply given up trying.
A particular set of socioeconomic risks stems from the difficulties in forecasting demand. While it is clear, for example, that energy demands, like those for water, tend to increase with population and GDP, they are more difficult to predict quantitatively because they are affected by increases in production efficiency, by emerging new technologies, and by possible changes in the pattern of energy use. Energy demands also are affected by international cartels and the cost of energy supplies, and by concerns about the environment that were either underestimated or not foreseen when a power plant was constructed. This occurs, of course, in both developing and developed countries, as exemplified by the reduced emphasis on nuclear energy in Germany, Italy, and the United States.
Given these risks, what should a developing country do? Primarily, it must develop strong mechanisms of technology assessment and risk evaluation. For any country, technology policy decisions are never isolated from political considerations. But the existence of a creditable capability for science and technology assessment and for science and technology policy is essential to survive in a knowledge-oriented world. That capacity must be honed by experience and frequent contacts with corresponding entities in other countries and with such international organizations as the World Bank.
Technology assessments should not be only retrospective; they also should operate in a feed-forward mode to determine foreseeable future impacts, the probability and magnitude of future risks, and possible corrective measures to reduce them. But in undertaking its assessments and risk evaluations, a developing country should not operate independently of an organization like the World Bank that endeavors to assist it and of other countries that are potentially relevant. In turn, the Bank, however strong its technical resources, can benefit from the information obtained from such institutions as the National Research Council, with its capacity to mobilize in a multidisciplinary fashion a large number of highly qualified scientists, engineers, economists, and health care personnel.
Two principles are particularly important for a developing country embarking on technological forecasting and assessment. First, it must avoid being captured by projects that may appear glamorous but do not respond to the urgent needs of the country or are unrealistic, such as being far above the simplicity threshold. Examples abound not only in developing countries but also in the industrial countries, the main difference being that developing countries cannot afford to invest very scarce resources poorly. Second, regardless of what direction the future may take, close attention to the connection between technology and socioeconomic developments is imperative. Failure to see the many possible pathologies of that connection is a major cause of breakdowns in the use of technology for development. 12 A sociotechnological factor of considerable importance, among many, is the different time constants of technological development and political life and associated different levels of knowledge and experience. Political changes occur both in the developing countries and in the more developed countries with which the developing countries need to interact in order to sustain their technological development. But the success of any technological development depends on continuity of conception, creation, and operation. If the political life span of persons involved in the technological process is much shorter, the learning curve must be started over and over again. The World Bank, with its inherent greater continuity, can perform a most needed balancing role in this regard.
WHAT ARE THE FUTURE COMPARATIVE ADVANTAGES FOR TODAY'S LABOR-SURPLUS DEVELOPING COUNTRIES?
As the world economy becomes ever more knowledge-based, it is clear that the value added made possible by information (by science, advanced design concepts, technology of intelligent materials, automation, software, sensors, advanced services, new medical concepts, etc.) is propelling today's economically more advanced countries. Thus to close the gap with these countries, developing countries cannot continue to rely over the long run on cheap labor. While a developing country cannot adopt the capital-intensive strategies of developed countries, it should not see itself stuck hopelessly with a labor-intensive strategy; a knowledge-based strategy offers it the opportunity to emerge from such a situation. The labor cost gap with the more advanced countries will close slowly, however, in spite of the exceptionally fast rates demonstrated by such countries as Taiwan or Korea. This will give many developing countries some breathing space, but they cannot stand still lest they fall further below the simplicity threshold. Even the poorer developing countries will need to gradually introduce computers and automation, enhanced educational systems, and appropriate science and technology policies to begin to transform their work forces and economies.
It is imperative as well that they add value to the fruits of their labor through an appropriate selection of products and technologies and an effective mix of the different factors of production. For example, the well-trodden path from the production of parts to that of complete assemblies offers the opportunity to add further value to those assemblies through, for example, software. But it would be foolish for a developing country to believe that it can utilize its labor cost advantage for the creation of an automotive industry, or any other industry far beyond the threshold of product and production simplicity. Opportunities in the service sectors that are labor-intensive in developed countries also should not be overlooked. For example, care of the world's increasingly large number of aged - care that cannot easily be supplied by relying only on technology-could be among several potential niches for developing countries. The production of custom-made, labor-intensive artifacts will remain a niche for a long time, but because of the growing saturation of consumer markets, this is not an activity that can offer employment to large numbers of workers unless it is coupled with ways to add further value to the artifacts. In short, a systematic approach is needed in order to find and exploit areas of opportunity.
More than ever before, the survival and progress of nations and their citizens depend on their abilities to generate and utilize knowledge. For developing countries, economic and social advancement will be achieved by learning to tap the global system for the generation and transmission of knowledge and to develop effective mechanisms for transferring knowledge into action. This process should not be a one-way street, however. Global networks also can unlock and distribute the knowledge that the developing countries possess and that the rest of the world needs-embedded, for example, in the genes of their plants and animals or associated with time-tested healing practices. One of the most important elements of knowledge for developing and developed countries alike is gained through sharing and comparing their experiences-successful or not-with technological, economic, and social development.
The best hope, then, of narrowing the gap between the developing countries and the more developed countries is a knowledge strategy. Such a strategy will enable a developing country to bypass steps in the development of technological systems that historically have had a long gestation-from telecommunications and transportation to medical services and the applications of genetic engineering. But the benefits of not having to repeat the entire learning curve for many technologies will be illusory if a developing country does not create the appropriate infrastructure to use knowledge effectively and to participate in the generation of new knowledge.
Obviously, each developing country must define the knowledge strategy that best suits its needs. The greatest challenge to the developing countries will lie in developing a new kind of sociotechnological knowledge that will enable them to advance without following the unsustainable model of today's industrial nations. The problem, of course, is that most developing countries are poorly equipped to develop and apply this new knowledge. Thus they need to work imaginatively, in close collaboration with international institutions and with developed countries, which by now have acquired a broader perspective on their own development and its impacts.
In formulating their strategies, developing countries also must consider how they can position themselves with respect to the simplicity threshold, how they can define the most desirable proportion among the different factors of production, how they can best meld indigenous creativity and innovation with the import of products and ideas, and how they can balance technological advances with social health-all of which will spell the difference for a developing country between success and inability to take off. And across the globe, a pivotal element of any knowledge strategy must be stronger national knowledge infrastructures and their global integration. The time has come to determine how this will be achieved.
1. Brian Hayes, “The World Wide Web,” American Scientist 82 (September-October 1994): 82.
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