Dynamics of Socio-Economic Development

Minggu yang lalu ikut kuliah seorang guest professor dari TU Eindhoven, Prof. Adam Szirmai. Beliau profesor dalam bidang technology and development studies, yang dalam kuliah ini membahas tentang hal-hal yang dibutuhkan oleh sebuah negara berkembang untuk menjadi negara maju. Karena seorang teman meminta saya untuk mengetikan kembali, saya posting sekalian di sini. Semoga ada manfaatnya.

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Development, in the perspective of science and technology, is the economic growth that leads to structural changes. Economic development in a country can be identified by other three aspects that come with it: reduced poverty, income equality, and employment creation. Economic development is a contribution to a society development, that can introduce a society to self confident society that can stand without (or less) outside interferes. Ultimately, development should give people freedom in every aspect.
There are some problems came up in a developing country: low poverty and malnutrition, low health standard and education, high share of agriculture, inequality between social classes in society, rapid population growth, explosive urbanization, underutilization, politics problems and corruption, environmental degradation, lack of technological ability (lack of the ability to use the technology), and human rights problem.

Reducing poverty

The most essential part in economic development is to reduce poverty. In some research it is concluded that to reduce poverty, a country needs to increase production capacity. Some ways in increasing productivity are increasing:
1. effort (work hours, etc)
2. capital accumulation
3. scale of production
4. accumulation of human capital & skill
5. efficiency (focusing on a certain field)

To increase productivity also means to increase technology. Japan’s (and now Korea’s and China’s) success in developing the country is their success in catching up the technology. This ability to tap into international technology advance must be supported by the capabilities to acquire, master, and adapt the technology. Capability of a country in investing for technology, negotiating with the owner of technology (in this case, a developed country), producing technology, and innovating technology are the requirements for the capabilities to catch up.

How to acquire the capabilities

Diversity in each country’s characters (e.g. income, population, natural resources, production structures, economic dynamics, history, etc) gives every developing country a unique solution. But as the key point, there are three aspects that need to balance: capital, technology, and education. An increase in number of PhDs in a country will be meaningless without the availability of the capital in the country to invest the technology. We can learn from many cases that this leads people to come back to the country where they obtained their degree. Unless they struggle to make the employment themselves (which somewhat needs the balance in capital and technology as well), not much things will be significant for the development.

So, is it possible for every country to excel?

A long debate. But however, it has been proven several time (by Japan and China) that the further you are to the technology frontier, the more possible you can make an extreme catch up.

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