incomes. Here also, as in the case of rising income inequality, the evidence is that there has been a rising lack of productive employment in almost all the poorer countries, especially among younger people in general and school leavers in particular. And the reasons for this seem so deep-rooted and self-reinforcing that it is difficult to foresee any outlook other than gloomy, unless action to tackle these root causes can be initiated.
The best brief definition o f the root cause for the disproportion between the demand for and the supply of employment is the disproportion between the rate of population increase and the available technology. An average poor country will have a rate of population increase of between 2.5% and 3% per year. In some countries it is even higher. The corresponding figure for a typical rich country would be 1% or less (in England for example it is only 0.5%). Here we have, to begin with, a disproportion of 3:1 or more in the sense that a typical “poor country economy” of a given size, say 10 million people, must create three times more employment opportunities than a typical “ rich country economy” of the same size. One Tenth o f the Resources But the typical “poor country economy” has only, perhaps, one-tenth the resources of the “ rich country” of the same size. Hence, even if the proportion o f its total resources which could be set aside for new productive employment creation through capital formation were the same in the two countries, the poor country would have to create three times as many jobs with onetenth the total resources. Thus resources per new job required would be only onethirtieth, 3—4%, of those in the rich country —a disproportion of 30:1.
Even this is not the end of the story. At the low income levels of poor countries, the proportion of resources which can be spared from essential consumption and used for job creation by the conventional method of capital formation may only be half of that of rich countries, say 7Vi%, instead of 15%. Thus the disproportion would be further doubled —from 30:1 to 60:1 or so. If the same technology is used and the same kind of jobs are created in the poor and rich countries, the resources which would be sufficient in the rich countries to create all the new jobs needed, would provide less than 2% of the new employment needed in the poor countries, leaving 98% of the new job seekers unemployed, hence poor, hence adding to the inequality of income distribution.
Here in a nutshell we have the problem. Obviously, the poor countries would need quite a different technology, one that spreads employment associated with any given volume of capital resources far more widely (or requires much lower resources per job). Yet in fact the technology which is available to them —or at least the technology they use —is not sufficiently different from that of the rich countries, not sufficiently employment-intensive to prevent spreading unemployment, poverty, and inequality. Why is this so? In the answer to this question, we have the key to the problem. The Technology of the Rich The present technology is a technology developed in the rich countries, by the rich countries, and for the rich countries. This is what has made them rich and is making them richer. We have no way of measuring the distribution of world technological power as between rich and poor countries. The only clue we have is a proxy measure, namely the money spent on technological innovation. This is the so-called R & D expenditure, expenditure on applied research, pilot and experimental development and on scientific and technological institutions. Naturally, the relation of inputs in the form of R & D expenditures and output in the form of technological innovation is not fixed, and there are other objections to such a simple measure. But it is nevertheless a striking fact that the share of the poor
INAPPROPRIATE TECHNOLOGY, AND
INAPPROPRIATE TECHNOLOGY BEGETS
INEQUALITY. countries in world R & D expenditure is only 2%, the same minute percentage of 2% which we found as the proportion of the total needed jobs which the poor countries can afford with the same technologies and cost per job.
I would suggest that this is no mere coincidence. The disproportion in the world’s distribution of R & D expenditures between rich and poor countries and the disproportion of resources available per job needed is the same, not just by coincidence but because these two phenomena are so closely linked. The technology which is right for the rich is wrong for the poor countries. It results in inappropriate products produced in a way which absorbs too many resources and provides too few jobs. It creates a reciprocal and cumulative tendency to increasing income inequalities. Capital-intensive technology creates inequalities, and inequality creates capital-intensive technologies. Unequal income distribution results in an artificial demand for the capital-intensive (and import-intensive) products consumed at the income levels of the rich countries by the small elite groups in the poor countries: it prevents the development of a mass market for more labourintensive simple commodities responding to specific and unique needs of the poor countries. But at the same time, inappropriate technology expressed in inappropriate products prevents employment, raises profit rates and the incomes of the small elite groups (and foreign investors) associated with the “modern” sector, thus generating income inequalities. Here we have a perfect specimen of one of the “vicious circles o f development”. Inequality begets inappropriate technology, and inappropriate technology begets inequality. A Force for Good or Evil To break this vicious circle, action will be needed at both ends. Deliberate policies of shifting investment to the purposes of employment creation, relief of poverty and reduction of income inequalities on the one hand; on the other hand, selection of more appropriate technologies where available, and their indigenous creation where they are not. The present author was in Kenya for part of last year in charge o f a large mission financed by the U.N. Development programme and organised by the International Labour Organisation to recommend an employment-oriented development strategy for that country. The report of this mission ( “iEmployment, Incomes and Equality: A Strategy fo r Increasing Productive Employment in Kenya”, published by the I.L.O., 1972) is based on a policy of income redistribution from growth and a radically different policy regarding technology. These were the twin pillars of the new strategy recommended for Kenya.
At the present time, then, the scientific and technological power of mankind, the greatest force for good or evil in the outlook for the human race, is not used for developing the technology which is right for the great majority of mankind living in the poor countries. Military, space and atomic research absorb half of it. No doubt there are spin-offs from these which may be of some value to the poorer countries here and there. But this is probably more than offset by types of R & D which are directly and demonstrably harmful to the poorer countries. The development of synthetic substitutes for natural tropical products and the brain drain from the poorer countries associated with the concentration of science and technology in the rich ones are perhaps the two most important examples of such harmful impacts. Violent Commotions Obviously, without deliberate new policies, ■the technological gap between the rich and poor countries will continue to increase. Technology will remain concentrated in the rich countries with all the mutually selfreinforcing factors in favour of such a concentration. The needs of the rich countries will increasingly diverge from those of the poor, and the technology of the rich —the only technology available — will become increasingly inappropriate for the poor. Internal inequalities, unemployment and po