Issues: Unequal flows of technology Flashcards
Overview
In the past, the majority of flows of technology were within HICs, as there was virtually no demand for technology in lower income countries.
Now, HICs and companies wish to invest in lower income countries due to the benefits they bring, so technology that can make capital gains (e.g. manufacturing equipment, components for assembly etc.) flows to LICs. This type of technology does not flow from LICs to HICs because there are less companies based in LICs that wish to invest in HICs (as there are less benefits, including higher wages).
In contrast, although design and research occurs in HICs, a lot of consumer technology is manufactured in lower income countries, only to be distributed to HICs. Phones, office and telecommunications technology, and electronics are mainly manufactured in lower income countries, then sold to HICs.
This is slowly changing though, with a higher demand for consumer technology in newly emerging economies, such as China.
The EU, for example, receives 10x the amount of electrical imports from China than it exports to China.
Benefits
● The economies of LICs can develop through technology investments, opening up factories and increasing employment. This also strengthens trade deals between HICs and LICs, which allows HICs to benefit from the exports of HICs.
● Companies benefit from products being produced overseas, meaning they can maximise profits.
● The concentration of technology innovation in HICs has lead to the development of beneficial technological advancements. This leads to consumers getting better products.
Problems
● HICs with developed markets have a technological advantage over lower income countries because they can afford to buy the technology. People in LICs cannot afford to purchase technology that will advance their economy and improve quality of life, meaning HICs can rapidly develop while LICs are left behind.
● It can be considered an injustice that the employees that manufacture and assemble consumer technology such as computers, phones, and household appliances receive so little compared with what they are sold for. Companies make a large majority of profits, whereas those who do a lot of the work are left with little income, as well as often poor working conditions. These countries rarely even have the benefits of the product they are creating - China is the largest producer of smartphones, yet only 55% of the population has a smartphone, compared to 77% of the USA.
● Companies investing technology into LICs means that HIC manufacturing jobs are often lost. This can leave many out of work due to job losses, and those with relevant training in manufacturing technology often have nowhere to go.
Information and data flows
Access to mobile and internet services is transforming people’s lives in less developed economies
EG ‘Village Phone’ Microfinance model pioneered in Bangladesh now being used in Uganda
Supported by world Bank
Loans allow purchase of a phone and charger
Enables access to internet and allows small businesses to be established eg providing info to farmers on prices
