The Economist had an article today on the challenges that emerging economies face with making initial adoptions of new technologies widespread. While it is easy to overly simplify the phenomenon that is technology transfer to the developing world by glossing over mobile phone stats or internet users, the harsh reality is that much of these technologies have still failed to become ubiquitous.
The article depicted the typical situation of a rapidly adopting emerging society in India:
In frenetic Mumbai, everyone seems to be jabbering non-stop on their mobile phones: according to India’s telecoms regulator, half of all urban dwellers have mobile- or fixed-telephone subscriptions and the number is growing by 8m a month. The India of internet cafés and internet tycoons produces more engineering graduates than America, makes software for racing cars and jet engines and is one of the top four pharmaceutical producers in the world.
The article referred to a World Bank study that recognized that technological adoption has consistently occurred at a quicker pace with each subsequent invention.
For 19th-century technologies the gap was long: 120 years for trains and open-hearth steel furnaces, 100 years for the telephone. For aviation and radio, invented in the early 20th century, the lag was 60 years. But for the PC and CAT scans the gap was around 20 years and for mobile phones just 16. In most countries, most technologies are available in some degree.
However, the study also put forth that while in industrialized countries, the prevalence of such technologies is very likely to hit %50 within years after introduction, in the emerging economies this is not so definite.
The bank has 67 examples of a technology reaching 5% of the market in developing countries—but only six went on to capture half the national market. Where it did catch on, it usually spread as quickly as in the West. But the more striking finding is that the spread was so rare. Developing countries have been good at getting access to technology—and much less good at putting it to widespread use.
As a result, technology use in developing countries is highly concentrated. Almost three-quarters of China’s high-tech trade comes from just four regions on the coast. More than two-thirds of the stock of foreign investment in Russia in 2000 was in Moscow and its surroundings. Whereas half of India’s city-dwellers have telephones, little more than one-twentieth of people in the countryside do.
Technologists remain optimistic, however, and point to the level of mobile phones in Indian urban centers only a decade ago as evidence that such technologies will spread over time. They also base much of this optimism on the force of leapfrogging.
Despite these hopeful claims, many issues still plague emerging economies with regard to the democratization of such technologies.
Broadly, two sets of obstacles stand in the way of technological progress in emerging economies. The first is their technological inheritance. Most advances are based on the labours of previous generations: you need electricity to run computers and reliable communications for modern health care, for instance. So countries that failed to adopt old technologies are at a disadvantage when it comes to new ones. Mobile phones, which require no wires, are a prominent exception.
The other set of problems has to do with the intangible things that affect a country’s capacity to absorb technology: education; R&D; financial systems; the quality of government. In general, developing countries’ educational levels have soared in the past decade or so. Middle-income countries have achieved universal primary-school enrolment and poor countries have increased the number of children completing primary school dramatically. Even so, illiteracy still bedevils some middle-income countries and many poor ones.