Table Of ContentThe ILO's World Employment Programme (WEP) aims to assist and encourage member
States to adopt and implement active policies and projects designed to promote full,
productive and freely chosen employment and to reduce poverty. Through its action-oriented
research, technical advisory services, national projects and the work of its regional employment
teams in Africa, Asia and Latin America, the WEP pays special attention to the longer-term
development problems of rural areas where the vast majority of poor and underemployed
people still live, and to the rapidly growing urban informal sector.
At the same time, in response to the economic crises and the growth in open unemployment
of the 1980s, the WEP has entered into ongoing dialogue with the social partners and other
international agencies on the social dimensions of adjustment, and is devoting a major part of
its policy analysis and advice to achieving greater equity in structural adjustment programmes.
Employment and poverty monitoring, direct employment creation and income generation for
vulnerable groups, Iinkages between macro-economic and micro-economic interventions,
technological change and labour market problems and policies are among the areas covered.
Through these overall activities, the ILO has been able to help national decision-makers to
reshape their policies and plans with the aim of eradicating mass poverty and promoting
productive employment.
This publication is the outcome of a WEP project.
TECHNOLOGY POLICY
FOR SMALL DEVELOPING
COUNTRIES
David J. C. Forsyth
Professor and Director of Developing Countries Research Unit
University of Strathclyde
A study prepared for the International Labour Office within the
frarnework of the World Employment Programme
Palgrave Macmillan
ISBN 978-1-349-10581-6 ISBN 978-1-349-10579-3 (eBook)
DOI 10.1007/978-1-349-10579-3
© International Labour Organisation 1990
Softcover reprint of the hardcover 1st edition 1990
All rights reserved. For information, write:
Scholarly and Reference Division,
StMartin's Press, Inc., 175 Fifth Avenue,
New York, N.Y. 10010
Frrst published in the United States of America in 1990
ISBN 978-0-312-04663-7
Ubrary of Congress Cataloging-in-Publication Data
Forsyth, David J. C.
Technology policy for small developing countries I David J. C.
Forsyth.
p. CIll.
Includes bibliographical references.
ISBN 978-0-312-04663-7
1. Technology and state-Developing countries. I. Title.
T49.5.F67 1990
338.9'27'091724-dc20 90-31551
CIP
The designations employed in ILO publications, which are in conformity with United Nations
practice, and the presentation of material therein do not imply the expression of any opinion
whatsoever on the part of the International Labour Office concerning the legal status of any country,
area or territory or of its authorities, or conceming the delimitation of its frontiers.
The responsibility for opinions expressed in studies and other contributions rests solely with their
authors, and publication does not constitute an endorsement by the International Labour Office of the
opinions expressed in them.
Reference to names of firms and commercial products and processes does not imply their endorse
ment by the International Labour Office, and any failure to mention a particular firm, commercial
product or process is not a sign of disapproval.
Contents
List of Tables and Figures vii
Abbreviations ix
FOREWORD xi
PART I INTRODUCTION
Chapter 1 - Introduction 1
Chapter 2 - Technology policy: Justification and aims 5
Chapter 3 - Concepts of "size" and "smallness" 15
PARTll THE ECONOMIC CONSEQUENCES OF SIZE IN
DEVELOPING COUNTRIES: THEORY AND EVIDENCE
Chapter 4 - Country size, technology and industrial development 37
Chapter 5 - Factor supply conditions and technology in SLDCs 61
Chapter 6 - Public administration in small developing countries 81
PARTill TECHNOLOGY POLICY IN SMALL DEVELOPING
COUNTRIES
Chapter 7 - The limits of macro-economic
policy in small developing countries 93
Chapter 8 - The aims of technology policy 101
Chapter 9 - The instruments of technology policy 135
Chapter 10 - Technology policy priorities in small
developing countries 155
Chapter 11 Concluding comment 175
APPENDIX I Growth and technology-related characteristics
of small economies 179
APPENDIX II Size of country and export instability 199
Bibiliography 205
Index 207
List of Tables and Figures
TABLES
2.1 Interrelationships amongst "primary aims" of policy 12
3.1 Composite size index for 150 LDCs, 1977/8 19
3.2 Correlation coefficients for indicators of
"economic size" 22
3A.1 Topographical nature of SLDCs 28
3A.2 Location of SLDCs 28
3A.3 Date of Independence of SLDCs 29
3A.4 Population: Basic data for 157 LDCs, 1980 29
3A.5 Population: Frequency distribution for 157
LDCs, 1980 30
3A.6 GNP/Capita: Basic data for 157 LDCs, 1980 31
3A.7 GNP/Capita: Frequency distribution for 157
LDCs, 1980 32
3A.8 Area: Basic data for 157 LDCs, 1980 31
3A.9 Area: Frequency distribution for 157
LDCs, 1980 33
4.1 Domestic production of, and imports of, capital goods 45
4.2 Four-firm concentration ratios for industry in Fiji, 1980 49
5.1 Banking structure and loan rate regulation in a
sampIe of SLDC commercial banks 67
5.2 Basic statistics on universities in SLDCs 69
6.1 Central government expenditure as per cent of GNP 85
8.1 Case Study: Background of technology selectors 126
8.2 Case Study: Sources of information on imported
technologies 126
10.1 Choice of technology: Policy variables, target
variables and policy instruments 158
List of tables and figures viii
10.2 Poliey aims and instruments 162
AI.1 Results of regression analysis of strueture and growth:
All eountries 192
AI.2 Results of regression analysis of strueture and growth:
Large eountries 196
AI.3 ResuIts of regression analysis of strueture and growth:
Small eountries 197
All. 1 Principal results of diseriminant analysis of
export instability 203
FIGURES
4.1 Output of Plant and Maehinery as % of GDP 44
4.2 Imports of Plant and Maehinery as % of GDP 44
4.3 Manufaetures as % of GDP 46
4.4 Exports as % of GDP 48
4.5 Imports as % of GDP 52
4.6 Geographical eoneentration of Imports of Plant
and Maehinery 54
5.1 Savings as % of GDP 63
5.2 Investment as % of GDP 64
5.3 Foreign Aid per eapita 65
6.1 Government Consumption as % of GDP 84
8.1 Capital Intensity in Manufaeturing 113
10.1 Scienee and Technology Poliey and the
Development Plan 172
10.2 Logistical and Funetional Seheme for a
Teehnology Poliey Unit 173
Abbreviations
DC Developed eountry
LDC Less developed eountry or area
LLDC Large less developed eountry
MNE Multinational enterprise
NIC Newly industrialising eountry
OLS Ordinary least squares
PFI Private foreign investment
QSE Qualified scientist/engineer
R&D Research and development
SLDC Smallless developed eountry
TP Teehnology poliey
TPI Teehnology poliey instrument
Foreword
The special social and economic problems of smaller developing countries and
island economies attributable to their small size and/or openness, have tended to
be neglected. With the growing concern about building endogenous technological
capacities in LDCs, these problems deserve much greater attention than they have
so far received.
This study by Professor David Forsyth of the University of Strathclyde examines
the special difficulties which small economies face in formulating and implementing
technology policies.
The study falls into three parts. In the first, a detailed analysis is undertaken of
the "trajectories" of key variables in the economic structure of LDCs as they
grow. It is found that the smaller economies as a group displaya distinctive
growth pattern with respect to technology-related variables. This leads to the
second part of the study which is devoted to the identification and examination of
associated development problems in small countries. It is concluded that small
size gives rise to particularly intractable difficulties in expanding indigenous
technological capacity , in devising and implementing effective technology plans,
in smoothing "adjustment" in the wake of technical innovation, in achieving
equilibrium in labour markets (especially those for highly-qualified labour), and in
effecting the efficient administration of technology policies.
In part three, a wide range of potential targets of technology policies is considered,
together with the instruments which might be used to implement such policies.
Suggestions for policy change include recommendations regarding restructuring
of factor markets, proposals for the improvement of central goverment (and
government agency) formulation and control of technology policies, and, in the
case of contiguous small economies (like those in the Caribbean, for example),
proposals for sub-regional programming with a view to reaping the benefits of
economies of scale.
The genesis of the study was a project of technical assistance to the Government
of Fiji, on the assessment of technology policy. This project was executed by the
ILO and financed by the United Nations Fund for Science and Technology for
Development (UNFSTD). It involved a review of existing policies with a bearing
on technology imports, adaption and local innovation. An attempt was also made
xii Technology policy for small developing countries
to assess the contribution of explicit and implicit technology policies and
programmes to the long-term evolution of endogenous capacities in Fiji.
This volume is not based on the experience of Fiji alone. Professor Forsyth has
had first-hand experience of other small economies such as Western Samoa,
Seychelles, Tonga, Swaziland, Sierra Leone, Liberia and Mauritius, which has
also been reflected here.
The present study represents a joint effort between the Technology and
Employment Branch of the ILO and the Science, Technology and Energy Division
ofthe UNDP.
Rustam Lalkaka Ajit Bhalla
Director, Chief,
United Nations Fund for Technology and Employment Branch
Science and Technology International Labour Office
for Development
United Nations Development
Programme
