TECHNOLOGY AND ECONOMIC DEVELOPMENT

TECHNOLOGY AND ECONOMIC DEVELOPMENT

Meaning of Technology

It is a useful knowledge pertaining to the art of production. Thus, it includes improvements in designing, plant, and machinery, research, invention, innovation, and such as activities through which technological improvements occur.

The development of new technical knowledge can be defined as the growth with the help of which goods can be produced; new uses of goods can be discovered or new resources can be discovered.

Stages:

The growth of technical knowledge can be broken down into the following stages.

(i) Formation of scientific principles.

(ii) Application of these principles to technical problems.

(iii) Discovery of technical inventions to the point of commercial exploitation.

The invention is the discovery of the new techniques while innovation is the practical application of an invention in production for the market. In other words, the former is a scientific fact, whereas the. later is an economic fact.

Role or Importance or Impact of Technology:

According to modern economists, technology is an efficient factor in production which plays a very important role in the process of economic development. The role or importance or impact of technology on economic development can be discussed as under.

(i) Increase In Labour Productivity

The technological progress results in an increase in the productivity of the labour force e.g. in the agriculture sector, the productivity of labour increases with the use of better agricultural instruments or. tools like Tractor, harvester, thrasher etc.

(ii) Human Capital Formation

The improved education, skill and training of the labour force, is called human capital formation. The use of new technology increases the above qualities of the labour force which lead to improving human capital formation.

(iii) To Break Vicious Circle of Poverty

With the use of the improved and new technique of production, the total production of the country increases. It is a helpful instrument to break the vicious circle of poverty from the supply side.

(iv) Increase in National Output

The use of improved techniques of production and technological progress bring about a significant increase in national output or income.

(v) The Exploitation of Natural Resources

The technical progress results in the exploitation and availability of natural resources e.g. oil, coal, water, minerals etc. It increases the ability to make more effective and fruitful use of natural resources.

(vi) Capital Formation

There is no doubt the technological progress is a very important factor in determining the rate of capital formation. The technical progress also increases the ability to make more effective use of capital equipment that has a very close connection with capital formation.

(vii) Less Wastage of Inputs

The wastage of inputs can be minimized with the use of technological progress in the presence of the same amount of inputs and production increases e.g. with the aid of power-driven farm equipment a marked increase has been brought about in agricultural yield per acre.

(viii) Better Quality Products

The quality of products improves with the use of modern methods of production e.g. better the quality cloth will be available in the textile industry by the use of improved techniques of production.

(ix) Economies of Scale

The economies of scale are the advantages which are attached to the quality and quantity of the products e.g. due to improved and new technology, the economies of large scale are bargaining power in buying and selling, low cost of production, higher productivity etc.

(x) Short Period Supply

The marginal efficiency of capital increases with the use of technological progress which has reduced the period of production of goods. Thus the supply of goods can be ensured in a short period to meet the increasing demand for goods.

(xi) Specialization

With the introduction of new techniques of production, the small scale production can be replaced to large scale production. It leads to specialization and goods have been standardized.

(xii) Expansion of Markets

A country by adding to its improved means of transport and communications, its power resources and factories need to expand their markets.

(xiii) More International Trade

A country exchanges its excess supply of goods with the rest of the world. It has to compete internationally with respect to the quality and quantity of its exports. Thus, a country can get more foreign exchange by exporting the best quality products. It is possible due to the use of modern techniques of production.

(xiv) Better Standard of Living

The standard of living in a society can be judged by the physical quality of life e.g. provision of food, shelter, health, education, water, sanitation, and other social overheads technology, the provision of the above facilities can be ensured.

(xv) Rate of Economic Growth

There is no doubt that technological progress is a very important factor in determining the rate of economic growth. All the developed and undeveloped countries are making their efforts to install improved technology in all their sectors. This process is leading the economies to the path of economic development. 

SUMMING UP

The technology has to be adapted to the local conditions of the economy with suitable changes. The adoption of modern technology in underdeveloped countries like Pakistan tends to less expensive and more productive and it is to play its role in accelerating the pace of economic development.

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