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As we noted above, the use and assimilation of new technologies presuppose the existence of a minimum of technological capabilities in developing countries to choose, acquire, generate, and apply technologies that are suited to their development objectives. Such capabilities would determine the rates and patterns of development and industrialization. Though the concept is somewhat elusive, it is clear that capabilities cannot be acquired overnight and that they will vary over time and space.
Technological capabilities can also vary between sectors [73, 21]. In the industrial sector, the elements of technology capability - production engineering, manufacture of capital goods, and research and development, etc. - are different from those essential for the services sector, for example . Technological capabilities may exist in both large and small industrial sectors.
On the basis of sample surveys undertaken in capital cities and larger towns in Asia (India, Bangladesh, and Thailand), Latin America (Ecuador and Peru), and Africa (Mali and Rwanda), an examination of technological capabilities in the small-scale informal sector of developing countries found, contrary to expectations, that even very small metal-working production units possess some capacity to adapt and modify tools and equipment. In some cases, these units demonstrate an indigenous capacity and ingenuity to manufacture simple equipment .
In general, technology capabilities in developing countries, whether considered in macro terms or in terms of elements, would depend on such factors as: adequate number and quality of human resources with practical experience, skills, and aptitude; useful technological information on sources and conditions of technology transfer; institutions for education and training, for research and development, and for engineering design and consultancy; favourable natural environment and factor endowments, attitudes and customs, etc. .
A pioneering piece of work by Enos  puts the concept and practice of technology capability in a macro perspective of growth modelling. It reviews existing models that try to incorporate elements of technology capability. On the basis of this review, Enos develops a model that incorporates the creation of skills over time. Three fundamental components of technological capability are identified: individuals embodying skills, training, and experience and inclination; institutions within which individuals are assembled; and a "common purpose" defined in terms of objectives and motivations. The last may or may not relate to national development objectives. Since capabilities vary at different levels of aggregation - micro, sectoral, and macro - it is possible that capabilities and common purpose of a few individuals do not fully correspond to national development objectives and may even be in conflict with them.
Prospects for the 1990s
Prospects for technology work in the 1990s will depend on the scenarios regarding the strategies and prospects of development in the third world. The Fourth Development Decade of the United Nations gives a prominent place to human resources development and employment generation. Similarly, the UNDP has adopted human development as a major goal for its development efforts .
If the development of human capabilities and potential is the goal of the current decade, technology policies and programmes would need to be considered in the context of achieving this goal. The focus of technology research may have to shift from the embodied technical change to disembodied technical change, and from processes and products to individuals and institutions necessary to promote their capabilities.
Although some work on building technological capabilities has already been done, our understanding of the nature and the magnitude of the task of creating it is still far from adequate. Enos  states "the economists' efforts to promote appropriate technology took for granted the environment in the developing countries and imagined techniques to be variable: the current efforts to stimulate technological capability take technology for granted and imagine the environment to be variable." A change in this environment would be necessary to improve the latent human potential to raise the level of capabilities in the developing countries. Also, to what extent is the technological capability of a country an intermediate input to the achievement of objectives, and to what extent is it an output? Do liberal technology imports facilitate or hinder a country's efforts to develop indigenous technology capabilities? Despite some empirical research, this question remains unanswered. Further efforts are needed to document and analyse critically the developing country experiences in this regard. It may be useful to compare and contrast open and closed economies to examine their experience of building indigenous technology capabilities over time.
In the 1990s, the new technological challenge will continue, with increasing innovations and new breakthroughs in such new technologies as biotechnologies, new materials, and information technology. An analysis of these technologies and their contributions to human as well as material development (through greater food security made possible by new biotechnologies) would merit further attention.
The structural adjustment measures introduced in the 1980s are also likely to continue. As a result of these measures, in many developing countries large numbers of people are being pushed into small and micro-enterprises to make a living. Can new technologies, through greater flexibility in production (so-called flexible specialization), enable a more successful small-scale industrialization than has been possible in the third world in the past? Are flexible specialization and small-batch production universal phenomena, or are they likely to be confined, at least in the 1990s, only to the industrialized countries? Answers to these questions require further investigation.
Under the influence of new industrial technologies, new macroeconomic policies and structural adjustment programmer, and new methods of industrial organization, the labour markets in both industrialized and developing countries are going to become more flexible. Informalization of the labour market and production is already being witnessed in the form of increases in casual employment, part-time and self-employment, flexible working hours, etc. The possible impact of new technologies on the informalization of work remains to be explored. Our knowledge about their impact on skill formation and substitution is also quite limited. Do new technologies have a capacity to enhance skills and resources? Under what circumstances can new technologies and blending raise overall employment? Are there trade-offs between direct and indirect employment effects of new technologies? This area of research is highly relevant to implementing the kind of strategy of human development noted above.
The enquiry into technology blending, started by the ILO World Employment Programme in the 1980s, needs further conceptual refinements and more empirical testing. What are the prerequisites for the developing countries to adopt a policy of blending? Under conditions of labour surplus, would it be economically feasible and socially desirable to apply new technologies in the place of traditional or conventional technologies?
The cost comparisons of alternative technologies including new technologies are very rare. Yet for developing country policy makers, it is important to know whether it is cost-effective to apply new technologies, which invariably have to be imported using scarce foreign exchange.
The 1990s may also witness a decline in the R&D resources allocated to technology development in the third world. This is likely to happen under the stringent application of structural adjustment programmes, since the results of R&D are essentially long term and often uncertain. What implications is this likely to have for the new technology diffusion within the developing countries and for the technological gaps between countries?
Within the third world, great heterogeneity prevails. It is therefore quite likely that technological gaps will also widen within this group of countries. The differential impact of new technologies by subgroups of developing countries is another area for future research.
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