Technology Gaps between Rich and Poor Countries

Abstract

The growing inequality in the international distribution of income is of relatively recent origin. It is a phenomenon of less than 200 years. It started towards the end of the eighteenth century when inventors combined engineering skills and entrepreneurial ingenuity, while a social and technical revolution in agriculture released the men and the food for industrialisation. Its twin causes are (a) the appearance of a new condition which permits the income and production of some countries to grow at much faster rates than those of others, and (b) the existence of obstacles to the spread of the benefits from the fast-growing to the slow-growing countries. We do not have far to seek for this permissive condition. It is neither the discovery of natural resources nor, as was thought at one time, the accumulation of capital as such. Accumulation of capital, without improvements in knowledge, could not have brought about the substantial increase in income per head that occurred. The ceiling that this condition sets is determined by the stock of scientific knowledge (know-why and know-that) and technology (know-how), by its application to production and organisation in industry, trade and agriculture and by its commercial exploitation.’ It is the continuing interaction between a succession of scientific, technological and industrial revolutions and the human, economic, political and social conditions that create and use these revolutions, that sets the upper limit to economic growth.¹

I am indebted to Jonathan Hughes, Constantine Vaitsos, Michael Sharpston and Hans Singer for helpful comments and particularly to Frances Stewart who has contributed to and clarified my ideas.