Social and Economic Problems Calling for Intermediate Technology

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Social and Economic Problems Calling for
Intermediate Technology
E.F. Schumacher
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Dualistic Economies

• Non-modern economic sectors
• Limited work opportunities
• Low productivity
• Developmental focus on urban centers further
  disadvantages non-modern sectors
• Migration to urban centers
• Development should include creation of an
  agro-industrial structure in rural areas
• Maximize work opportunities for underemployed
• Labor force participation
• Dynamic approach to development
• Many small workplaces
• Note the recent success of micro-financing

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The Nature of the Task

• Create work where people live
• Low capital investment, many investments
• Simple production methods
• Focus production on local materials and local
  consumption
• Regional approach (within political unit)
• Including distributed education
• Appropriate technologies

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Appropriate Technology

• Goal many workplaces suitable to
• Local environment
• Capital resources
• Raw materials
• Labor force
• Markets
• Intermediate Technology
• More productive than indigenous technology
• Cheaper than sophisticated technology
• Economically and vocationally accessible

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Intermediate Technology

• Objections
• Assigns inferior technology to less developed
  regions
• Does not maximize output
• Counter arguments
• Do not confuse worker/output ratio with
  capital/output ratio
• Consider dynamics of underemployed economy
• Compare Schumachers Earth Moving project
  example with the U.S. Civilian Conservation
  Corps projects during Great Depression

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Intermediate Technology, cont.

• Objection
• Scarce entrepreneurial ability resource should
  be maximized by focusing best technologies on
  most entrepreneurial workforce
• Counter argument
• Scarcity of entrepreneurial workforce is a
  byproduct of inappropriate technology
• Entrepreneurialism is relative

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Intermediate Technology, cont.

• Objections
• Products of intermediate technology
• require protection within the producing country
• unsuitable for export
• Counter arguments
• Appropriate technology may produce more
  affordable goods for local markets
• Export issue examples of success?
• Chinese and Netherlands bicycles
• Others?

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Applicability of Intermediate Technology

• First stage of processing local products
• Larger scale example
• Small, local petroleum refineries (25 years ago)
• New example small wind or solar projects
• In this case, the intermediate characteristic
  is intermittent energy production, which is
  unacceptable in a more developed area

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Development of Intermediate Technologies

• Possible Approaches
• Adapt existing industrial techniques to local
  conditions
• Adapt advanced technologies to meet local
  requirements
• Focus RD on intermediate technologies
• Taking into account economic limitations
• Scale of operations
• Relative costs of capital and labor
• Current Events Georgia Tech project