Trade, Technology and Growth: On Analysis and Policies for Developing Countries

In the era of globalization the importance of technology as a determining factor for economic performance has increased. Simultaneously, strides made in different domains of technological activities have facilitated the global integration process. The increasing importance of technology is manifested also in the theories of economic growth and international trade in the last few decades. However, these theories have not been able to deal with the technology factor in a comprehensive manner. It is concluded in the book that the linkages proposed by the new growth theory from openness to technology to growth cannot be achieved unless a country possesses adequate technological capability to make an optimum use of technological resources; unless the multilateral rules governing technology flows promote technological advantage; unless countries acquire capabilities to translate technological advantage into export comparative advantage and unless technological modernisation efforts are combined with employment-generation policies. The main findings of the study need to be analysed with an analytical understanding of the interlinkages among trade, technology, growth and employment generation. The book emphasizes upon adopting employment generation policies, as with their income-effects they would be demand generating. The internal or domestic sources of growth impulses could lead to expansion in economic activities in all the sectors of the economy, propelling greater integration with the global economy as well, if based on addressing supply-side efficiency concerns and imperatives of capital-resource mobilization. This itself could contribute to technological capability building efforts but as a policy option, the book argues for adopting a direct approach in evolving a National Technological Surface.