The Hindu Business Line : Reducing poverty — Choosing the right technologies

THIRTY years after the publication of E. F. Schumacher's celebrated book, Small is Beautiful, which proposed matching the cost and scale of technologies to the people and resources of developing nations, a basic question remains: How can technology reduce poverty without destroying the Earth?

During the height of the Internet boom a few years ago, there were many who believed — or wanted to believe — that information technology could bring unimagined benefits to the poor, especially to those in isolated rural areas. This, in fact, became conventional wisdom in developing countries such as India where the Internet became the de facto tool for modernising the country. But, in spite of the conveniences that information technology undoubtedly provides, India's vast rural population appears unimpressed by the results to date.

The recent elections in India became, in part, a referendum on the country's development trajectory and the voters made it clear that a better strategy was needed. The bottomline is that advanced technologies have not made much of a difference to the lives of the 350 million Indians who live on less than a dollar a day, or the large numbers that are malnourished, unemployed, underemployed, or struggling to survive as farmers.

And, yet, most of us suspect that technology plays a significant role in the development process. The only practical way out of poverty for the large population of India and other developing countries is through work, and any profitable work requires tools. But what kinds of technological tools do developing societies need?

To find an answer to this, Schumacher arrived at the idea of intermediate technology, which he described as much more productive than the indigenous technology that developing countries have used for centuries, but much cheaper than the highly capital-intensive technology of modern industry. Central to his thesis was the notion that the average cost of creating a job should be well within the means of a nation.

Recent reports suggest that India failed to achieve its goal of creating 10 million new jobs a year largely because the capital required to create a job — well above $6,000 on an average — was too high. India now has about 40 million looking for jobs, with another 35 million likely to join them within three years.

Schumacher's solution to this problem was to choose the right mix of technologies that could produce the necessary jobs at an affordable cost. This is a much more nuanced position than government policies that primarily advocate advanced technologies in every situation.

Economic success is intricately linked to technology. But technologies that are imported from developed countries often turn out to be inappropriate for conditions in the developing world. They are typically too expensive for the average user, waste precious natural resources, or save labour through automation when more jobs are needed.

India's automobile industry is a case in point. It is growing fast in collaboration with the American and Japanese automakers, and producing nearly a million passenger vehicles a year. But transportation systems built around private automobiles are out of reach of the vast majority of Indians. They are also inefficient ways of moving people, wasting valuable fuel, land area and raw materials in a country of limited natural and financial resources. The logical alternative — modern, efficient public transport that most people can afford — remains a dream as the poor crowd into India's overloaded trains and buses.

Manufacturing technologies brought into developing countries by multinational corporations are often capital-intensive, labour-saving technologies. Imported goods also bring with them, indirectly, the technologies used to create them. The net result of these technologies is economic growth that creates a relatively small number of jobs for technologists and technicians, while the developing world's large labour pool — much of it poor, uneducated, and semiskilled — remains an untapped resource.

The argument that workers should counter technological change by retraining and moving up the value chain hardly applies to countries such as India where over 40 per cent of the population is still illiterate and very few have the education and skills to survive major changes. While the better-educated workers can adapt to disruptive technological change, most of the others need technologies adapted to their specific conditions. For developing countries, this means affordable technologies that conserve natural resources while encouraging an optimal level of human labour.

Schumacher observed that the choice of technology is the biggest decision that a developing country must make. This remains valid even today, as globalisation propels us toward a homogenous world where countries may soon be unable make such choices. Deliberately choosing the right technologies, rather than just the biggest and most powerful technologies available, may hold the key to a liveable future.

(The author is a technologist, entrepreneur and writer based in Silicon Valley.)

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