Manufacturing, Technology, and Economic Growth by Carlos Sabillon

Author:Carlos Sabillon [Sabillon, Carlos]
Language: eng
Format: epub
ISBN: 9780765618375
Google: CZCD4Ik-K-oC
Goodreads: 4141106
Publisher: Routledge
Published: 1999-08-31T00:00:00+00:00

Innovation and Technology

Since the creation of technology is so resource-absorbing, investment-intensive, and mentally demanding, it is inevitable that much funding is required for it. With such a nature, it is also inevitable that the private sector instinctively refuses to commit its capital to that effort. Since manufacturing is the sector fundamentally responsible for the creation and reproduction of technology, the private sector therefore develops a natural tendency to abstain from it. The only thing that manages to reduce that risk-averse nature is for the government to supply incentives that significantly reduce the costs of production.

A look at the structure of R&D costs during the second half of the twentieth century significantly substantiates such an assertion. In 1950 to 1969, in its efforts to produce weapons, space goods, and several other goods at a fast pace, Washington decided to reduce the costs of production of private manufacturers by (among other things) decreasing their R&D expenditures. In these years, the government absorbed about 70 percent of the overall R&D costs of the nation. In the following decades, the government’s share dropped considerably and by the 1990s it was only 40 percent.102

Most analysts and policy makers thought that overall levels of R&D would not decrease in the post-1960s decades, as the funds cut from defense would by means of market mechanisms find their way to the laboratories of civilian private companies. Many actually became convinced that R&D overall would experience an increase. While the private sector’s R&D share did increase, overall levels did not. During the 1960s R&D as a share of GDP averaged about 2.8 percent, but by the 1990s the figures had dropped to about 2.3 percent.103

Even more important was that the rate of technological development decelerated considerably. This was only inevitable when seen from the perspective of the manufacturing thesis. The funds spent on weapons would have surely been more of a benefit to society had they been reallocated to civilian manufacturing, but since they were not, they ended up in other sectors, that do not have the capacity to create technology. As less was invested in the sector that is fundamentally responsible for the generation of technology, R&D expenditures had no other alternative but to decrease. Since support for civilian manufacturing was not strong the private sector was not going to incur the massive investments that the creation of any new civilian technology demanded.

Not all of the technology that was consumed in the United States during the second half of the twentieth century was produced domestically; much of it was imported. Here also the same phenomenon took place. When support for the sector was strong (1950s and 1960s), technology was imported at a fast pace, and when support decreased, technology was imported at a slower pace. That would explain why the overall pace of technological development was much faster during the first two decades than in the three that followed. Since manufacturing is the sector fundamentally responsible for the reproduction of technology, and even the reproduction is highly investment-intensive,

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.