Innovation in Low and Medium Technology (LMT)

Transcript:Innovation in Low and Medium Technology (LMT):
Innovation in Low and Medium Technology (LMT) Sectors Low-tech’’ industry…ore than just a matter of semantics It is crucial for understanding where the comparative advantages of countries at varying levels of development may lie. Policy obsession with ‘‘gaps’’ in ‘‘high-tech’’ industries has distracted the attention of both policy makers and academics away from making more positive efforts to develop and sustain development in other sectoral direction s which some countries might find more viable. High-tech industries in the OECD account for only about 3 per cent of value-added rising to 8.5 per cent with medium-high-tech industries like car industry Governments need to give more thought to the activities which generate most of the output and employment of their countries and the best targets for ‘‘dynamic comparative advantage’’ for growth. Labour and capital… The LMT industries are usually regarded as providing many points of entry for developing countries, in view of their relative labor-intensity (e.g. software in India). Some branches of such ‘‘low-tech’’ industries as food processing are highly capital-intensive (e.g. tobacco and many beverages), as are some branches of building materials (e.g. cement). It also depend on the specific context (es. U.S.A. vs India). Conventional classification Not just traditional ‘‘low-tech’’ industries but also those classified by the OECD as ‘‘medium-tech” (= ‘‘low- and medium-tech’’, LMT industries.): Mature industries; more slow changes; included non-manufacturing activities (e.g. Oil and Gas); sometimes integrated with “services”… Conventional classifications of sectors as high- or low-tech (etc.), as long practised by the OECD, are becoming less and less useful for academic analysis To be fair, the OECD (2003) came - rightly—to place greater emphasis on the ‘‘knowledge-intensity’’ of industries. Measuring the direct plus indirect technology content of particular industries. What is a LMT Sector and what innovation in it? Appraising innovation through adopting conventional sectoral classifications can be misleading. Innovation is rapid in particular segments of both high-tech and LMT ‘‘sectors,’’ (even if more segments of the high-tech sectors display such rapid innovation) It is possible to detach the high-tech segments from LMT ‘‘industries’’ : e.g. Artificial fibers in textiles when they arose to compete with natural fibers but the final products remain very similar, so this looks specious…. . What are we talking about? Conventionally, sectors of all types were supposed to be different not only in the goods and services but also in the technologies and processes they used to produce them. However… The