Hello to all,
I'm actually interested in the effects of technology on the level of economic development as measured by real GDP per capita. My results robustly indicate that in countries with low levels of technology, technology significantly reduces GDP per capita. However, I do not have clear theoretical arguments to explain this result.
Could someone suggest me some references to explain such a result?
Thank you.
Christophe Martial Mbassi
You have concluded that "in countries with low levels of technology, technology significantly reduces GDP per capita."
In normal industrial economies, this kind of phenomena do not occur. See my paper:
Article A new framework for analyzing technological change
(Journal of Evolutionary Economics 2020)The paper proves that
in a (closed) economy when
(1) it does not loose technological knowledge (or the set of production techniques increases),
(2) markup rates that each firm uses to set the prices of its products do not increase,
(3) firms select more profitable production techniques (in the sense it chooses those that give lesser unit full cost), and
(4) the rate of unemployment does not increase,
the real GDP per capita increases.
Although this is a theorem which holds for a large variety of economies, if Christophe's observation is valid, he must be able to find reasons why some of four conditions do not hold for the economies he observes.
A possibility is that an innovation (or the introduction of technologies) is not made adequately. For example, the political and business leaders may be behaving not on the basis of economic rationality, but on the prestige or any other extra-economic reasons. In an open economy, it often happens that one introduces highest technology from abroad but cannot operate it as assumed: too frequent troubles for the machines and installations, no stable utility supplies, the lack of the product market, no alternative jobs for those who were replaced by adopting a new production process, and others.
In my impression, Christophe is misjudging as effects of technology those various reasons and mismanagement that accompany technological innovation. If managed properly, technology does not reduce GDP per capita (In particular for those who continue to be employed).
Christophe, in countries with low levels of technology. New Technology drives economic growth in certain sectors of the economy and hardly economic development (qualitative). It is important to mention that one of the first effects of technological changes is unemployment or (The fear of technology-driven unemployment), However, If New technologies replace human labour y can simultaneously create jobs and if new economic activities emerge, no negative effects.
The great technological changes have generated high levels of unemployment, the Industrial Revolution that began in the second half of the eighteenth century in Great Britain.
Best regards
Christophe Martial Mbassi
have you read my paper that I indicated on my comment on April 10.
If you have any difficulty to obtain the paper, I will be glad to send you the PDF.
Dear Professor Germán Héctor González ,
Thank you for your contribution.
I use cross-sectional data for a sample of developed and developing countries. The estimated equation has a quadratic form on past technology adoption data. The overall technology index includes technologies in the following sectors: communications, transportation, agriculture, and military.
Dear Professor Yoshinori Shiozawa
Thank you very much for your article which you suggested I read. I was able to download it and read it. And it will certainly be very useful for me to explain my results. In sum, I take from it that the dynamic efficiency and the matching of technologies to the characteristics of the economy favor the beneficial effects of technology; otherwise, the technology might not have the expected effects or even generate negative effects.
I don't know if that's the right way to put it.
Dear Professor Martha Pantoja
Thank you for your contribution. It would be appropriate for me to check whether the adoption of technology was eventually accompanied by high unemployment in the countries in my sample.
I can imagine this explanation: If technological level is low, any innovation does not necessarily lead to higher real per capita GDP, also common in settings where population is growing faster than product. Countries or regions technologically lagged need to boost innovation much more than developed countries to climb steps in the path of growth (besides, are you thinking in growth or development?). Otherwise advanced regions are still in technology frontier and maintain their advantage relative to LDCs. In other words, not any size of improvement assures a real progress when the country of region interact with other competitors in trade and capital flows. I hope it helps
Thank you for your contribution dear Professor Valentina Viego
Dear Christophe:
In 1760, the majority of British workers were employed in agriculture. In 1840, technological changes increased production while decreasing production time. technology meant that food could be produced with fewer workers.
It's important to mention, that the industrial revolution boost economic growth In the words of Nobel laureate Robert Lucas: "for the first time in history, the living standards of the masses of ordinary people have begun to undergo sustained growth" source: Robert E. Lucas, Lectures on Economic Growth, Harvard University Press, 2002, ISBN 978-0-674-01601-9, pp. 109-110.
Best regards
Dear Professors Germán Héctor González , Yoshinori Shiozawa , Martha Pantoja , Valentina Viego thank you for your very usefull answers. Please find attached our recently published paper :
Article Historical technology and current economic development: Reas...
Article Historical technology and current economic development: Reas...
Dear; Christophe Martial Mbassi
Definitely yes, in a first stage the countries have to buy the technology and since they are countries with scarce resources, this implies an indebtedness as was the experience in developing countries. In addition, other negative aspects are: buying obsolete technology, which requires an adaptation process on the part of the workers.
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