"Microelectronics, Long Waves and Structural Change: New Perspectives for Developing Countries"

1985. “Microelectronics, Long Waves and Structural Change: New Perspectives for Developing Countries”, World Development, Vol. 13, Nº 3, pp. 441-463

Download: WD_microelec_longwaves.pdf (127kb)
 

Table of Contents:


Introduction
1. Technology and long waves
(a) A techno-economic paradigm as a set of common sense guidelines for technological and investment decisions
(b) Long wave recessions as the manifestation of a "mismatch" between the socioinstitutional framework and the techno-economic sphere
(c) The construction of a new model of growth as the outcome of an intensive process of social confrontation, creativity and compromise
2. The characteristics of the techno-economic paradigm based on microelectronics
(a) Information intensity vs. energy and materials intensity
(b) Flexible vs mass production
(c) New concepts for organizational efficiency
3. Challenges and perspectives for developing countries in the present long wave transition
(a) A new space for development thinking
(b) Some old obstacles reduced
(c) Transnationals and autonomous development
(d) The risk of "missing the boat"
 

Introduction:

At present, the prospects for developing countries seem bleaker than ever. As general stagnation continues, with short-lived spurts of growth in the industrialized world, export opportunities for the Third World are significantly reduced. This, combined with the rising cost of imports and a reduction la investment flows, is putting unbearable pressures on weak debt-ridden economies. At the same time, the electronics revolution seems to have widened the technological gap to unbreachable proportions.

This article will present an alternative view. It will argue that the world is experiencing a structural crisis, during which, in spite of the obvious difficulties, there would be greater - rather than lesser - scope for a major positive change in development prospects.

The argument is based on a somewhat Schumpeterian (1) interpretation of the so-called Kondratiev long waves (2). The explanation proposed here for the recurrence of cycles of about 50 years' duration in economic growth, attributes a central role to the diffusion of successive technological revolutions, representing a quantum jump in potential productivity for all or most of the economy. The reason for the long wave pattern would be that, to yield its full growth potential, each of these "techno-economic paradigms" - as we shall call them - requires a fundamental restructuring of the socio- institutional framework, on the national and international levels. The resulting social and institutional transformations then determine the general shape of economic development, or the "mode of growth" of the next long wave. A Kondratiev wave is thus defined here as the rise and fall of a mode of growth and each crisis as the painful transition from one mode of growth to the next.

The present period is seen as one such transition. The mode of growth that led to the boom of the 1950s and 1960s has run its course. The world must now make the transition from a set of social and institutional arrangements, shaped by the characteristics - and fostering the full deployment - of a constellation of mass production technologies based on low-cost oil, to another capable of fruitful and appropriate interaction with a new system of flexible technologies, based on low-cost electronics.

This means that extrapolations from the past or from the turbulent present are misleading. If and when a new upswing is unleashed in the world economy, it is likely to be framed by a set of national and international institutions, which will differ as much from those of the l950s and 1960s as these differed from the prevailing conditions in the "Belle Epoque" at the turn of the century. It also means that the present is precisely the period of creation of those future conditions and that all social actors, including the deve loping countries, can and should take an active part in that complex - and obviously conflict ridden - trial-and-error process.

To undertake this task successfully however, it is essential to identify the new range of the possible. The deeper the understanding of the potentialities and limitations of the new "techno-economic paradigm", the greater the scope for shaping it imaginatively and effectively through innovative action in the social and institutional spheres. Section 2 of this paper will introduce the concept of "techno-economic paradigms" and present an outline of the long wave argument 3 . This theoretical framework is a necessary prerequisite for understanding the relevance of the discussions that follow. Section 3 undertakes the analysis of the defining features of the presently diffusing microelectronics paradigm, touching upon some of the questions it raises for development strategies. Section 4 is a brief exploration into the challenges and opportunities facing the developing countries in the present transition. As a whole, the article is intended as food for thought. The reader will find no statistics; references will be sparse, though hundreds could be given; examples will be provided only when they seem indispensable to illustrate an idea rather than to prove it. This is fully intentional. The paper is conceived mainly as a contribution for opening new paths in development thinking. As the argument evolves, it will become increasingly clear that we are making a case for defining the present period as a time for informed speculation and bold experimentation.

1 See Schumpeter (1939)

2 Kondratiev (1935)

Publications
 

"TECHNOLOGICAL REVOLUTIONS AND FINANCIAL CAPITAL:The Dynamics of Bubbles and Golden Ages"

Published 2002

...the book fills an important gap in the literature on business cycles and innovations. I most strongly commend it to all those attempting to understand the past and future evolution of technology and the economy.'

Christopher Freeman, Emeritus Professor, SPRU,
University of Sussex, UK

'...Carlota Perez shows us that historically technological revolutions arrive with remarkable regularity, and that economies react to them in predictable phases. Her argument provides much needed perspective not just on history, but on our own times. And especially on our own information revolution.'

W. Brian Arthur, Santa Fe Institute, New Mexico

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