The impact of microelectronics on employment and developing countries—An introduction

153 North-Holland

Pubiishing

Company

Microprocessing and MI, __~

7 119811 153-159

~programming

The Impact of Wlicroelectrsnics on Employment snd Developing ChuntriesAn Introduction It is hoped

van Eijbergen

Han

further

work

that

methodological Relatively

little attention

h?s beer. p%d so fa: m the

of micro-electronics

impact

on e;nploymenr

speak of its consequences

for

the

developing

Quanti?ative

are

seriously

statistics from

countrizs). hampered

by

for many countries

this,

methodological

the economies

a Jack of

studies

difficulties

adequate

i 1 I. Apart

face

(as

will

of

serious

be

shown

it is

In this situation tional

iabour

Secretariat a

Nations),

impact

agency

the

capital,

Iabour,

not

be

the

limited

to

economies.

the

will

international

As sioned “The (Centre ment,

have

a first Impact for

energy,

countries

The

of

the

recently

labour

. . .”

will

feel

them

that these

research

on

the

commis-

released

the book

by Juan

in lnternationaf aim

of this

io include

study

available

countries

effects

Reda

Manage-

particular

economy

ping cauntries,

IL0

influence

industrialized

the debate

the

will

the information

extend

ore-

to save

~ndistrialized

was “to draw together market

microRecog-

changes

be supposed

of Micro-Electronics”

Geneva).

on

division of labour.

the IL0

Education

the

of new

of these

considerable

outcome

in 1979,

of

designed

advanced

Developing

existing

variety

and

effects

also, and it can reasonably eflects

with

usage

explicitly

msterials

that

Organira-

will lead in the 1980’s

of a large

and to changes

considered

permanent

at a globalscale.

nizing that micro-elnctronics ducts

ilL0, Labour

in 1979 a study

increasing

employment

to The emergence

the Interna-

associated

commissioned

of

electronicson

ihat

in Geneva

lnternstional

specialized

United the

Office

of the

fwtunate

and

on to

on the develo-

and on the international

and

A bibliography

to foster

study

may

SWnulate

the development

statisrical

research

pointing

on a country-by-country

to recent

basis is given

in

of this

literature at the end

this development.

The core of the issue is nor technological, Rada

points

str+.ing

formation

division of

his jnok Instead, major f:o.ti lab5ur

out.

to note,

rtnagrned

below)

tion,

area.

ILO

analyses

in the world

qualititative

lnot t3

this

so es to promote

in terms

technology, by George “f984”,

the current

of the development that

Orwell

about

as Mr.

for example,

of

the

some

137

it is of in-

devices

30 years ago

100 are now practical debate

is centred

sacis~political

themes:

the

of information

or data,

and the

in 121.

on fwo

ownership

and

effects

of

problem

is

dlsplucement.

-~-he rationale clearly

In this regard,

described

of the first mentioned by Mr. &da

in his Introduction:

implications. From this material the following conclusions can be drawn. Being basically concerned with handling, processing, storing, and retrieving information, information technology is related in many ways to the functions of human intelligence. This fact marks a new and different progression over historical discoveries which led to the multiplication of human muscle power and to the mastery of new sources of energy as a substitute for it. Like the human brain, rhe microprocessor and microcomputer are universal information-processing devices that can be u\ed to ,?erform a m,ide variety 5f Functions. No mechanical or inteil-crual activity can take place without jome form of informaripn exchange: this euplains the pervasiveness of micro-eIectronic technotcpy. Thti need for information technology stems I’rom IWO inter-related factors. First, information ii. accunmlatinp at such a rate in all fields that in the highly industria!ised countries an increa!;ing proportion of the iatour force is engaged in handling ini‘ormation. This trend is even becoming evident in some ad\,anced developing countries. Secondly, there is a need to increase productivity in of-‘Ice and clerical work since economic growth can n5 !onger be achieved by an increase in indi,strial pl-oductivity alone: in the industrialised market rc+ilomy sectors

countries of the

automation

economy

is necessary

to maintain

in all

inter-national

conipeiitiveness. Coupled with the nature of the technoiogy are its technical characrerist its and particularly its econ0m~. The F. ices of’ components, compu:er power and tclecnmlnur~ications are falling at unprecedenled speed. and this fall explains r:7e
and pervasiveness

of micro-elecrronics.

to find a field in which the processing power of micro-electronics cannot be used. II is difficult

The applications affectmanufacturing, by altering

products

ant.1 proces-

V3; ofl’icc work, by mtionolising routirle nformaIion-tulndlinp opctatiolls, and by increhqing the in&prndcncc of office workers from former channels of communication; service?, by increasing automation, self-service and the substitutinr: of goods for perscn-to .>erson

srrvices; a:~1 in format ion

IIGK

infra5tructure.

the speed of h;mdling

by altcrin# tix iiiformrariilrl infix ir~itiun

and the development of natir)n;t! ~61 rn~~xi-tiorml date networks. The combination of lhesc elements clcariy a,ffci’!3 the individual and socio-econo&s and poltr~~.al structures at the national and intcrnarional le~sts. informarion technalogyBy any standard, components, computers telccommunicsand tions-is spreading very fast. Electronics f’r the fastest-growing industry in almost al! industrialised countries, and out-performs the general growth rate of rhe economy. The main fnrr~ behind the rapid dif...~iion of the technology is r!ic to c~:inain interndneed for the firms corxerned tionally competitive, and thus markel penetration in any one country depends or. Ihc behdyiour ~11 competitors. Nevertheless, a number of factors act as brakes. From an economic point of vierv rhc single rno%t important check is the need to amortise old cquipment and the over-all cost of new applications. The inadequacy of existing Eeiecommunications faciliTradifional ties will also slow down applications. and deep-rooted managerial practices alw act as a brake, coupled with legal rescrict;ons in home fields. The basic attitude of trade unions has been one of “change by consent”. and the reau~~c~n ot’ the general public Lo further centraiisarion, threats to privacy and so on will regulate rather fhan slow down the application of the new information S+ tems. In developing countries rhe technology is drffusing rapidly but is mainly restricted to tradifional applications. The main constraints on diffusion are: the low cost of labour, which renders the equipment less competitive and makes amortisation take longer; government pcJicy on fariffs. applications, technology transfer and telecornmunications; and the lack ofsk?lls, particularly for non-conventional applications and productidn p recesses . The fult development of information technology is possible only in a world market. This constraint is due to the economies of scale rc luired to amortise the tremendous research and development expenses which a firm must incur and the enormous

on society

and

income

the population time or at alt. Appropriate quired

is not forms

privacy

and

other

of

of

of social

tlmt there

to ensure

mu&

for long periods

distribution cmpbyed

human

when

control

are rights

will he re-

no violations and that

of

know.

in a small teshnocrathus polarising the political system and rarefying the political debate. On the other hand, responsible use of new systems and devices could lrad to democratisatian and political and administrative as well as physical decentralisation. Owing to the development of national and international data networks, dependence among countries sharing computer resources is increasing. Transborder data flows are intensifying the concentration of information-intensive act&ities in some developed countries: while data providing the basis for decision-making will flow towards the developed countries, information flowing towards the developing countries will embody decisions already taken. “Electronic zonsultancy” and transfer of data to be processed abroad involve a loss of local income and jobs, rince in economic terms they amount to the export of clerical and scientific work, a sort of “electronic brain drain”. There sre also important implications in relation tc- transfer of technology: hitherto, by and large, thir has been a question of e+ipment or “hardware”; but the world is increasingly faced with the trrcsnational

ledge will not be concentrated tic Clite,

I?ON of nn intangible trl

rrtm~eadous

difficult In tr:ice. ethical

lo idenrify At

concepts

and

tions

information, value,

the same

time,

or

interests

which

and cultural

and

it is

are not easy

informaticn

values,

which is

although

and its movements

judgements

to the needs

good,

econarrC

reflects

embodies

may not correspond

identity

of various

na-

and otltler groups.

information tional division

technology

of labour

will affect the internain the following ways:

1. T’hc increase in automation lessens !he imporcosts in total Fro&&on tance of direct labour costs. thus making the ma:mfacture of formerly labour intensive goods economically reasible in developed economies. This effect is atready apparent with regard to goods such as textile?, garments and electronic products, which the develo-’

pmg

oY.tniries

U’icd co r.8.;;

the ecQclomicuIty nwrc **orid. In rhesc ctise’r rhc its:, developed automntian,

mne

and

dustries

which

vive in the

II:

prrr

rttr

is Ire& In

were potential countries

oi’

:nd~arit.;~<*

cr0de-d

key indmrirs

COUlXrie5.

f’er to dev-lo?ing

isqp: quLknrrrii_~

~crrri~9ct~i~rc

cutirttrics

tCPthe dWClOp&

:a

i

d IL%wtlp:sI

crt

thtz~i~sh

arc murnitry

ild&ti
cirrdirla~e5

50rWZ infor

frans-

will rlow be abIc to sur-

developed

countries

automation. 3. The characteristics

of the

wiih

the help

oi

;I atior~ pro-

cessing

technology reinforce some of the main advantages of the induc’rialised marker econom? countries, namely advanced n.anagcm, nt technrques, extensive co-ordination, efficiency and systematic

marketing.

mass production industries (e.g. textiles and garments) are increasingly launching OUI. into research and development and becoming capital-intensive, thus entering qhe high-techuo!ogy ;ategory, in which design and qualit) of procontrol are essential ro the acceptability 3.

Traditional

d11cts. cl. The

technology permits further industrial and service concentration and vertical (forward) Integration, which in turn implies streamlinIng in certain sectors, the accumulation of resources and an increase in the resourcesand marketing drive of companies. However. the 103% ot multinational production flexibility and innobativc capacity in industrial giants creates considerable opportunitie+ for newcomers. These opportunities may be seared and exploited, at least Car a while. by cmall businesses. However. fur the technology-based reasons already indicated, they will establish !hemselves not in the developing cou;ltrleb but in ~flo~: that are alreac’y developed, 5. The shif! from labour-intensive to capitalintensive activities, which is implied by the use of micro-electronic technology, will affect capital requirements and capital formz&m.

The foregoing of transferring dustrialised far

more

snmed.

trends

countries remote

With

developirg

suggcsi

industries

few

t!~ !l<:.>siblllr?;

tire adwanced

to the dcvrlst$ng

than

countries

;!w

from had

exceptions,

previousI)

in-

~ounttic’r been

i\ M-

it is urikely

thrtr

will be able to cwtbiine

frigfi

nomic

problems

to more diFficult relaand the Southen hemisphere. This difficulty wilk be increased by a less favourable attitude in developed counirks t-wards internationai co-operation because of their own internal problems and competition amoung themselves. The lack of progress in the North-South dialogue shows that there are no easy answers to the situation, but neither is it helpful to dismiss further complications in the hope that they might simply go away. One way of easing some of the difficuhies would clearly be the development of a more comprehento science and sive body of knowledge in relation technology in general and its effect on the fabric of society and the international and national division of labour in particular. In this respect, information technology is a case study in a much broader field that calls for Further attention. The advent of information technology is full of opportunities and also dangers; the direction it finally takes will depend largely on action at the national and international level and joint assessment among users. producers, governments. unions and academics. What Is clear at this state is that, given current trends, there is no time to be lost, “The

Impact

and

I:over):

by J. Rada

of Micro-Electronics”

trsnn pubtished r.:H~1211

thus

the Northern

tions between

by the International

G~eva

22,

92-Z-102378;

Labour ISBN

(limp

cover):

92-Z-

Switzerland.

ISBN

(hard

has

Office,

‘,OZ383-4. RePerences I1

!S

Jonasson, Computerisatlon and Human and Social Re(Ed.), Human Choice and Computers, 2 (North-Holland, Amsterdam, ISBN: 0 444 quwements, in: A. Movahowitz

85456 81. $i. 60. [2’ David

Goodman. “Countdown to 1984: Big Brother may be right on schedule”, in The Futunst IWashington, World Future Societvl, Dec. 1978, pp. N-355.

I31 Simon Nora and Alain Mint: b’informatisation Rapport

B M. le PrCsidem de la R@ublique

de/a socr.Gt~, (Paris, La Docu-

mznfation Fran+&& 19781, pp. 71-72, and ibid., &lnne.res, VOI, 1’ N~uvelle

informatique

No. 2: Aaimundo alSo the series of

et nouvelle

croissance,

Annex

Beca: “Les baoques de donn%s”. lnformatics

Studies and

See

Information,

Computer, Communication Policy IICCPI publications of the Organisation for Economic Co-operation and Development. particularly No. 2 in the latter series: The usage ef internations;

data nehhwrks

in 1Lrope

(Paris, OECD, 1979).

BibEiography I

/nterrlational

on Employmer~t nn Western 1. The lmpacf of Micro-Electronics Europe in the 1980’s. Union Inel~futv. 8rus sels. Eelg,um. 2. Mxroelectronics Conference l%enwoort. The Nerhcrlanr 5. 19771 held under the auspices 01 the lriternstlonal Sactal furo~ean Cowdinatnn Center for ReScience Council. search and Documentation in Sociaf Sciences, Vtenna 3 DECO. tnterfututes: Fang the $~~ture~ Masterrtg the Pro bable and Managing the Unprediuable IParis. 147%

European Trade

//

ranada

1

2

3

4.

Peitchinis. S.G Techno!agical for SkIlled Manpower. Studies of Technology. 3epartment of nf Calgaw. Alberta. Ott 1979, Boris Mathe.. Comouterwation View. Ottawa. C&nunicatvx 1980. I8 pp, 3 Michael McLean. The Impact

:/I. 1.

JV.

F. R. Gwmanv

Char gem -;rtd the Z+mb-,~> on the Emplcyrwnt Effwtc Economies. The Uw/ers~.< 55 PP and Emplovment A ~aboi.~c Vforkers o! Canada. Jw of ihe Mrcrceier_rrun~:s

In