Knowledge, learning and development: policy lessons from the Mercosur experience José Eduardo Cassiolato Economics of Innovation Group, Institute of Economics, Federal University of Rio de Janeiro - UFRJ, Brazil, Email:
[email protected]
Helena M. M. Lastres Economics of Innovation Group, Institute of Economics and Post-Graduation Program in Information Science PPCI, Federal University of Rio de Janeiro - UFRJ, Brazil, Email:
[email protected]
First version of the paper prepared for the DRUID's Summer Conference on the Learning Economy – Firms, Regions and Nation Specific Institutions, Rebild, June 15-17, 2000
1. Introduction
In the so-called Information and/or Knowledge Era, the emergence of the ICT (information and communication technologies) paradigm and the increasing economic competition and acceleration of the globalisation process are producing significant impact in the way industrial and technological development is produced with important consequences to economic development. As a result, the concepts of: production and innovation, competitiveness, firms’ organisation and strategies, Nation state and its forms of intervention are being reviewed and new approaches are needed. Of course information and knowledge have always been important in human evolution. The notion of “Knowledge Economy” relates to the observation that, since the post-war period, the economy has increasingly relied on knowledge-based activities than ever before. Therefore, three interrelated main characteristics of the world economy nowadays are: (i) the proportion of labour that handles tangible goods has become smaller than the proportion engaged in the production, distribution and processing of knowledge; (ii) the increasing share of knowledge and information in the value of many products and services; (iii) the rapid
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growth of knowledge-intensive activities, which have become the heart of recent economic expansion. In this discussion it is important to note the trend towards dematerialization; that is the reduction – both in relative and absolute terms – of the importance of the material component in the production of goods and services. An obvious example is software, which can be developed, produced, bought, distributed, consumed and discharged without assuming physical formats. The conversion of different types of codified knowledge and information into electronic format offers the possibility of a minimum dependency on matter, reducing, then, the costs associated to the consumption of energy and physical resources, into its development, production and consumption. Additionally, virtual reality is increasingly being used in activities where human physical presence used to be indispensable, as in the case teaching, conferences, consultancy, medical visits and even operations. It is important to stress that these transformations are dramatically challenging traditional economic concepts. They are also urging the development of new theories and instruments to deal with them. As pointed out in other papers, the production and distribution of knowledge have some features, which are not compatible with approaches and models prevalent on orthodox economic theory. One small example, of this rather important discussion, refers to the obvious fact that information and knowledge are resources which, differently from energy and materials, are (more than abundant) inexhaustible. Their consumption do not destroy them; and when they are sold, transferred or given, this does not mean that they are lost. This is partially why the specificities of the new patterns of economic development expose even more the restrictions of traditional economic approaches, theories and correlated indicators and statistics systems (Lastres and Ferraz, 1999). A related point refers to the difficulty these approaches have insofar as providing sufficient conditions to (i) measure and evaluate of the impacts of such transformations on different economies and societies; (ii)
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analyse the new forms of insertion and roles of these countries in the international division of labour associated to the new pattern of economic accumulation (Lastres and Cassiolato, 2000). The development of this new pattern can be seen as an alternative to the restrictions pose by the energy and material-intensive mass-production (and highly polluting) Fordist paradigm of the 1950s and 1960s. In this sense, the recent transformations offer important new opportunities. However, at the same time, it also presents new challenges for firms, sectors, countries, regions and people. It is now recognised that - together with the new possibilities offered by the increasing diffusion of the ICTs, new forms of social polarisation and exclusion can be created. These are linked to digital illiteracy, as well as to unequal access to the new products and services and the opportunities to acquire and renew knowledge basis and skills, which are required to make use of them. The basic aim of this paper is to reflect on the consequences of these transformations on developing countries. The analysis will focus on their new mode of insertion and role in the new international division of labour, which is being conformed. In this sense it will analyse one of the most visible characteristics of the new economy – the diffusion of ICTs – focusing particularly at the MERCOSUR recent experience. Item 2 will attempt to examine the knowledge economy from the point of view of developing countries through a discussion about the local character of innovation and diffusion processes simultaneously defined. Item 3 will discuss how are Mercosur countries being integrated into the world economy from the point of view of trade, investment and information flows that are associated with the “knowledge economy”, looking. It will finish with policy lessons from the discussion.
2 - Diffusion of ICTs. Knowledge and learning
Although the importance of ICTs has become more and more visible, most actors in today’s
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society are relatively unlearned about the knowledge-based economy. It has even been argued that we are leaving instead in an “ignorance economy” pointing out to some of its recent manifestations: the millennium bug and the cost of keeping it at bay; the continuum fluctuation of the value of technology stocks; and the still poor record of governments and institutions in efficiently buying and implementing ICT systems. The unifying factor in all three examples is that while the economy is being dictated by technological change, most people have little or no technological knowledge of even the most basic kind. This is, in fact, the idea suggested by several analysts who insist that a significant part of the literature dealing with innovation and diffusion of ICTs is biased towards the technological imperative of the microelectronics revolution (Mansell 1994). An essentially linear "technology push'' perspective continues to mark much research on the determinants of change in the so-called knowledge-based economy and on the role of ICTs on these changes. To argue with the idea that the growing knowledge-intensity of the economy is mainly a supply phenomenon, a better understanding of the factors surrounding the diffusion of new technology and technology-intensive products in the economy and society is needed. This diffusion – understood as the use of new ICTs in an efficient way - is, in fact, very different from simply acquiring hardware and software from external vendors. It requires significant involvement of the adopting organisation/institution and encompasses extensive, time-consuming processes of learning. Learning and knowledge acquisition are central processes of efficient diffusion. It has been constantly argued that a lack of efficient diffusion of ICTs are at the origin of the well-known productivity paradox , regarding their (low) impact on the dynamics of productivity. Petit and Soete (1998), for example, in discussing the paradox point out that it certainly encompasses important and complex learning processes: • at the firm level where efficient use of new technologies is heavily dependent on other
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users, be it subcontractors, customers or other firms and partners ; • at the level of the technology producers, where producers adjust equipment to different user needs; and • at the consumer level where cultural barriers play their role in slowing down the adoption of particular new "practices" in some cases, while building up barriers to access in other cases. Such a nexus of loosely related learning processes gives strong credit to the assumption that the transition from one technological system to another may well last a long time (Freeman 1987). In fact, the argument was that even though the ICT revolution is bringing profound and pervasive changes influencing the behaviour of the entire economy, its diffusion involves a complex interaction between technological, economic, social and political forces so that to attain its "full economic benefits (is dependent on ) ... processes of social experimentation and learning which are still at an early stage" (Freeman and Soete, 1994, p. 42). Clearly, the idea is that diffusion of ICTs is a process characterised not only by uncertainties but by strong social, cultural and political processes that are specific to the different environments. Some important contributions have been made for explaining how learning processes delay productivity gains. Particularly worth mentioning is a parallel between the diffusion of modern computer and another general purpose engine, the electric dynamo (David 1990). Although, stressing that learning processes are very time-consuming is a fundamentally correct point, one has to be a bit careful in drawing such comparisons. Aksoy (1991), for example, pointed out that there is an important difference between these two products, since their diffusion patterns would be similar only if they are supposed to be homogeneous, commodity-type products. This emphasis on the physical side of new technologies is incompatible with the ICTs. Aksoy (1991) argues that the novel characteristic of the new technologies, is that they
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process non-physical phenomena - information -, which is intrinsically non-homogeneous. This feature of new ICTs should call for alternative models, where diffusion is mutually determined with innovation since the dynamics of achieving productivity gains from the mechanisation of information-processing functions is not dependent on the level and degree of performance of ICTs. It is instead, related
with the extent to which information
requirements are defined, brought into light and highlighted by agents for each distinct area of application. In short, agents are shapers of technologies rather than receivers of it (Aksoy 1991: 405). Aksoy (1991) suggested that an efficient diffusion of TT should only occur with greater involvement of users, since from the user's point of view the computer is not a homogeneous commodity, even though it has features of a commodity from the point of view of suppliers. The user is particularly important to the innovation/diffusion process of ICTs since the software component of these technologies is flexible, open and well-suited to user’s intervention. In other words, the main input in ICTs system is information, which is flexible and user-driven. Intervention allows users to insert the knowledge – transformed into information – which is specific to their processes into the IT system. Then, the “present productivity” paradox should be looked at under other perspectives, since it refers to learning processes loosely characterised, strongly associated with the diffusion process. In effect such characterisation cannot avoid to consider simultaneously the part played by learning processes taking place at the production and at the demand side, with both processes being linked. The incorporation of ICTs elements into products, processes and organisational systems require direct user-involvement in technology development and design to an extent that is greater than in other areas of technical change. Compared with some other areas of technology, the application of many areas of ICTs requires much less standardised systems
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that are highly specific to the characteristics of individual firms, their products and processes, and their markets. Specifications of these system are not easily transferred in the form of 'ready-made' capital goods and blueprints. Therefore, their efficient introduction requires much more localised technical change. Moreover, that localisation must often go beyond the routine 'adaptation' of systems. It has to be deeply rooted in development and design of the hardware, and especially the software, in the immediate context of use. Also, since that frequently involves relatively complex engineering and design, the importance of tacit knowledge is often particularly great. In particular, however, what is frequently involved is the integration of electronics/TT elements and systems within existing products, processes and organisational procedures, and large proportions of the tacit and other knowledge needed for localised development and design must therefore be drawn from the 'user' of those elements and systems. The spread of ICT has changed the role of information: ICT enhances the divisibility and storage of information, its processing, transportation and communication, and consequently its accessibility and tradability. In principle, this has improved access to codified knowledge. Yet, in order to benefit from this improved access, developing countries need to strengthen their tacit knowledge base. This has far-reaching implications for the process of knowledge creation: its effectiveness critically depends on linkages and interactions among participants in this process. Applications of ICTs involve also networks. This raises important issues about 'network externalities' (Katz and Shapiro 1983), with progressive diffusion yielding falling transactions costs and benefits to all users, not just the marginal adopters. The network characteristics of ICT systems have important implications at the inter-firm level. Significant benefits accrue to individual firms (as 'externalities' from the actions of other firms) as the overall density of ICTs adopters and users increases within the total population of
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geographically related and market-linked firms. In particular, the efficiency of using ICTs systems increases with increasing local availability of (i) information about the technology from other users, (ii) a trained and experienced workforce, (iii) technical assistance and maintenance services, (iv) suppliers of equipment and software, and (v) complementary innovations - both supplier-developed and user-generated, and both technical and organisational. In this sense to fully appreciate the spread of ICT into a knowledge economy one should relinquish traditional thinking about diffusion which concentrates on the "quantity" of new ICTs being used (number of computer per capita, number of Internet providers, etc) and not on how efficiently ICTs are being introduced. Orthodox theory approached technology diffusion through 'epidemic' models by which diffusion is seen as pushed by the expected profitability of innovations and driven by the dissemination of information about their superior technical and economic characteristics. There have been several fundamental objections to this type of analysis based on maximising behaviour and the corresponding equilibria. Here, however, one basic criticism will be pointed out: over time learning and selection processes foster both the evolution of the technologies to be adopted and the characteristics of the actual and potential adopters. In fact, one chief aspect of the diffusion process is its dependence on ignorance and learning. Such phenomena relate to users learning the relative characteristics of different innovations as much as about producers learning the characteristics of production processes. Thus the appropriate relationship between the various innovations and their characteristics will not be determined 'a priori' but will be learnt during the diffusion process (Georghiou et al. 1986). Social, economic and political selection linked to the diffusion process will shape the technology path. In other words, the interaction supplier/user of the technology and the existence of a somewhat sophisticated pool of technical skills in the surrounding environment are important elements in the very development process of a new technology.
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As a consequence diffusion processes are not separated from innovation processes. The above discussion seems to imply that to be an effective user a country needs to acquire skills and capabilities that go beyond the ones received through the import of sophisticated machinery and products. Gaining access to available techniques may lead to static efficiencies but to be an efficient user of the new technologies, a firm (or a country) also has to acquire some knowledge through a long interactive process of learning-by-innovating where user/producer relations play a significant role. These types of dynamic efficiencies are acquired through the development of technological skills and the knowledge to obtain and retain competitive ability. So, it could be argued that, the very adoption of new ICTs, in large parts of the developing world seems hampered by the absence of a local capacity to innovate. There is empirical evidence suggesting that the rate of diffusion of ICTs across countries is influenced by these systemic, strong cumulative effects of 'interrelatedness' (Antonelli 1986). In fact it is difficult to obtain all the relevant information and skills for ICTs if a high degree of interrelatedness between using and producing them (Allen 1988). This was explicitly suggested by some authors who argued that “unless all, or most of the 'electronic jigsaw' is in place, the systemic advantages of automation are difficult to capture … (and) … in some parts of the third world only those technologies associated with product characteristics are diffusing (Kaplinsky, 1988: 7-8). This conclusion may not be so surprising since, as already repeated, the geographical proximity between groups of users and producers constitutes a comparative advantage (Lundvall 1988). The point to be emphasised here, however, is that although these features of ICT production and diffusion are deemed to be essential in the analyses of developed countries, they are surprisingly absent when diffusion to developing countries is mentioned. In these cases it is as if the traditional neo-classical diffusion models – stressing the number
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of “adopters” and not the quality of the adoption - were valid again.
3 – The integration of Mercosur countries in the knowledge-based globalisation process
Petit and Soete (1998)propose that most characteristics of the structural changes in the flows of trade, investment and finance that are part and parcel of the globalisation process are associated the development and diffusion of ICTs. To them at the roots of the capabilities linked to structural changes are the accumulation of knowledge and the potential developed in information and communication technologies. The linkage between ICT diffusion and the globalisation is a commonly accepted feature of the “knowledge economy” and can be verified empirically through some particular flows. The most significant to the discussion here made are trade and knowledge flows. As for trade flows, in the 1980s and 1990s, they expanded more rapidly after a number of regional groups were established and consolidated. Such arrangements are all very different in nature. What is common to all such arrangements is that they boost intra-regional trade flows: in South East Asia they grew from one fifth to one third of trade flows between 1983 and 1993, in South America - from one tenth to one fourth. This phenomenon is also apparent in Europe and North America, though less pronounced. Data about the pattern of Latin American (and Mercosur) exports, however, suggest a specialisation in sectors and areas of relatively low dynamism. As it may be gathered from Table 1, in 1998, the share of exports of very dynamic goods (those for which international trade grew at least 10% in value from 1982-84 to 1996-98) in total exports, was 18% in Brazil and 16% in Argentina. This contrasts, for example, with 55% for Japan, 46% for Germany, 42% for the USA and 48% for Korea
Table 1 – Share of Exports of “Very Dynamic” Goods* in Total Exports – 1998 Selected Countries 10
Country % Country % Japan 55 Malaysia 57 USA 42 Korea 48 Germany 46 India 19 France 41 Brazil 18 Spain 40 Argentina 16 Italy 38 Chile 9 * “Very Dynamic” are goods for which the world trade grew at least 10% in value from 198284 to 1996-98 Source: IEDI (2000), quoted in Folha de São Paulo, 25/04/2000, p. 2.
Although the export profile of the Mercosur economies has evolved in such a way that industrialized goods are increasingly important, the insertion of Mercosur countries in the international market is still characterised by the exports of commodities that are intensive in natural resources and/or energy and in low wage. These commodities have shown a tendency to low dynamism, excess supply and a consequent price stagnation. The progressive erosion of international competitiveness of Mercosur countries is associated with the loss of world market shares as indicated by the data shown in Table 2. Export growth of these countries has been much slower than the increase in world trade. Brazil, for example, accounted for 1.5% of world exports in 1984; in 1993 and 1996 the same figures were 1% and 0.93% respectively. However, the situation is even worse if intra-Mercosur trade is excluded. In this case, Brazil’s share declined from 1.42% in 1984 to 0.79% in 1995, Argentina’s from 0.31% in 1986 to 0.28% in 1995 and Uruguay from 0,037% to 0,022% over the same period. In the globalisation period these countries are all losing importance in export markets.
Table 2 - Mercosur Countries' Share in World Trade Selected Brazil (%) Argentina (%) Paraguay (%) Years
1
1984
1.500
2 1.426
1
2 NA
NA
1
Uruguay (%) 2
NA
NA
1
2 NA
NA
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1986
1.116
1.026
0.342
0.315
0.012 0.005
0.056 0.037
1990
0.943
0.903
0.371
0.316
0.029 0.017
0.051 0.033
1995
0.916
0.794
0.413
0.279
0.016 0.007
0.042 0.022
1 – Total Exports of Country over Total World Exports 2 – Same as 1 less Exports to Other Mercosur Countries Source: Cassiolato and Lastres, 2000
Then, for the first change in the structure of world trade, it is observed that the integration of Mercosur is made through an specialisation in sectors with low dynamism. Mercosur countries are practically absent of trade flows in new technologies. Brazil’s share of world exports of hi-tech products decreased from 0.6% in 1985, to 0.26% in 1991 and 0.19% in 1995. Argentina’s share decreased from 0.08% in 1985 to 0.04% in 1995. In both cases, the relative decline was accompanied by an absolute one, while total exports of these goods more than doubled during the period (Table 3). Table 3 - Total Exports of Hi-tech Products – 1985/1995 Selected Groups of Countries (Million of ECU and %) 1985 1991 1995 Mil ECU % Mil ECU % Mil ECU % European Union 139795 50.6 136761 43.1 193871 38.0 Nafta 61846 22.4 92054 28.9 121194 23.7 Latin America ( less 1959 0.7 1074 0.3 1314 0.3 Mexico) - (Brasil) 1697 0.6 817 0.26 982 0.19 - (Argentina) 232 0.08 221 0.06 222 0.04 Asia* 64583 23.4 69777 21.9 149588 29.3 Total 276237 317999 510710 * Japan, Korea, Taiwan and Singapore Source: European Union (1997)
A second important change in the pattern of trade flows associated with the knowledge economy is that the moderate rise in intra-regional trade flows within Europe and North America was accompanied by a marked development of intra-trade, e.g. trade within the same product group. A significant amount of trade in differentiated products is undertaken
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between affiliates of the same firm. This international division of production and distribution is more important when the technological level of the product is high, i.e. when information and knowledge intensity is high. This type of trade flows is characteristic of the integration of activities by MNCs. Then, this type of structural change in trade is associated with a change in the volume and structure of FDI flows, that are, again related to the new technologies. In what refers to these trends, the integration of Mercosur countries, is in fact, a one-way road. 1 During the 1990s, Latin-American countries have aggressively pursued policies geared to attract foreign direct investment (FDI) as a way to accelerate their integration to the world economy and to increase competitiveness. As a result flows of FDI to the region grew from US$ 8 billion in 1990 to US$ 67.3 billion in1998. As a consequence, the stock of FDI grew 60% during the same period (Mortimore 1999). Although inflows in the 1990s are approximately 13 times of what was observed during the 1970s, economic growth has been 50% lower than the what was obtained in that period. Perhaps one of the main reasons for that performance is that FDI in the 1990s was mostly directed to merger and acquisition of existing firms rather than greenfield investment. In Mercosur countries, empirical evidence suggest that inward investment during the 1990s has actively followed market seeking forms (Table 4). A recent study which attempted to uncover the strategies of TNC subsidiaries that are planning new investment found that they are basically import-intensive and aim at directing their production to the internal (Mercosur) market and are not geared to exports (Laplane and Sarti 1998). These two features of foreign direct investment in Mercosur countries – relative
1 This is similar to the third strcutural change in trade flows, that is the fact that a growing share of trade is in services. In this case, the significant growth in imports has been accompanied by a relative stagnation in the level of exports. CEPAL estimates that in 1997-1998, Latin American countries experienced an average deficit in the services account (except interest paid) of e US$ 21,7 billion. Brazil contributed with more than 50% of this deficit. Only the relation profit remittance over exports of goods and services grows from 4.1% in 1991 to 7.5% in 1998 (Cano 1999).
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concentration in acquisitions of local firms and market seeking, import intensive forms – have had a critical impact on local innovation systems. In fact, take-over activities of local firms by transnational firms had detrimental effects on the innovation capacity in the enterprises concerned. Several experiences in Brazil illustrate this. For example, in 1996 and 1997, a number of TNCs acquired several large domestic auto parts producers - Metal Leve, Freios Varga and Cofap. Subsequently, the R&D activities of the local firms were downgraded, and notably their frontier research was relocated to the parent firms’ R&D centres in their home countries. Surprisingly, even in many of the country’s high-technology firms, R&D activities were scaled down when TNCs bought into them. This was the case, for example, when in 1992 Alcatel purchased Elebra – one of the most important producers of switching systems. In 1999, Zetax and Batik, two domestic firms producing and developing a technologically advanced switching systems called Trópico, became part of Lucent Technologies. Interviews indicated that Lucent was not interested in local R&D, preferring to rely on technologies developed in the parent company.
A similar process has been observed in other
telecommunications TNCs active in Brazil. Since they are increasingly exposed to international competition, they are scaling down local R&D as a cost-reducing strategy. In particular, R&D activities geared to the development of new products is discontinued, and effort shifted into the more simple adaptation of imported processes and products. In most cases, this has meant that highly-qualified engineers engaged in R&D are transferred to other, less-specialised functions, such as production, quality assurance, sales or marketing. A related process observed in the hi-technology telecommunications and information technology clusters in Campinas and São Carlos is that the newly established affiliates are not linking into locally-based supplier networks. Instead, they operate in total isolation from the domestic innovation system, relating to their parent companies and other affiliates rather
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than to local firms. This too has a negative impact on local R&D capacity As a result, the country is losing the competitive edge it had developed in some product markets. This reinforces a process of increasing import intensity that began with trade liberalisation in the early 1990s. For example, the import penetration coefficient for parts and components in the car industry increased from eight per cent in 1993 to 20 - 25 per cent in 1996; import penetration in information technology and telecommunications products soared from 29 per cent in 1993 to around 70 per cent in 1996 (Laplane, Suzigan, and Sarti, 1998). If
local production of high-technology intermediate inputs in production continues to
decrease, the share of imports is bound to intensify further. The impact on technology would then be reinforced by a problematic impact on the trade balance. The final recent trend refers to the internationalisation of information and knowledge. The use of ICTs is critical to this dimension. As proxy indicators for it one could think of the formalised (and publicly announced) international co-operation agreements between firms and human resources. Table 5 presents information about strategic technological alliances in which developing countries’ firms participated during the 1980-94 period. As it is known, a series of studies have demonstrated a geographical concentration of these agreements on advanced countries. The so-called Triad (the US, Japan, the EC and EFTA countries) accounted for approximately 95% of all the agreements recorded in the 80s and 90s. For the few, remaining, alliances with participation of firms in developing countries (140 during the 1980s), only the Asian NICs entered the picture in significant numbers. Latin American’s share is not only insignificant but has decreased in relative terms: it was only 6% during 1980/87 and 4% during 1987/94.
Table 5 - Strategic technological alliances in developing countries by region – 1980/1987 and 1987/1994 1980/1987
1987/1994
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% of Total Alliances Southeast Asia NICs Others Asia and Africa Latin America Eastern Europe TOTAL Fonte: Narula e Sadowsky (1998)
63,94 17,01 6,12 12,93 100,00
55,85 5,05 3,84 35,66 100,00
The human resources issue is particularly pertinent to learning processes in the knowledge economy and to the ICT industry. As O’Connor (1985: 325) has argued, the computer industry is essentially a knowledge-intensive industry wherein skilled, highly trained scientific, engineering and technical labour power is probably the single most important asset’. Thus an enormous demand for skilled labour is a feature of the knowledge economy. The shortage of supply of such labour has been well documented for the advanced industrial countries, since the 1980s (Ernst 1985). In Brazil, the setting up of a very skilled human resources base is widely accepted as a positive outcome of the Brazilian experience in ICT industries during the 1980s (Hewitt 1988). With, the structural reforms of the 1990s, however, overall employment in the ICT sectors was cut by half during the first half of the decade. Most important, employment of graduated personnel fell from twenty-four thousand to thirteen thousand from 1989 to 1992, and is falling further. Also, empirical research confirmed that besides this decrease in the total number of qualified personnel some of the engineers which were engaged in R&D activities were transferred to other activities, such as marketing, production, sales and technical assistance (Cassiolato and Baptista 1996) There is also evidence that the highly qualified workforce in ICT industries is moving overseas, particularly to work in fast-growing American firms. With few – and diminishing job opportunities locally, skilled R&D engineers and other technicians are increasingly recruited in Brazil to work in local branches of U.S. corporations, and are then transferred overseas. Direct recruitment also occurs, as demonstrated by recent advertisements in the
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local press recruiting software Ph.D.s to work in the U.S. For Brazil this highly qualified workforce migration represents a “brain drain” of scarce human resources (Botelho et al 1999). In a more general level, from 1990 to 1998, the absolute number of employed engineers and R%D technicians in Brazil has decreased 12,3%. But perhaps more important is that the relative share of these workers is very small in Brazil. In 1996 they were only 7.6% of employed workers while the similar percentage was 31,5% in Germany, 14,4% in Korea and 24,9% in Singapore (Table 6).
Table 6 Engineers and R&D technicians as a percentage of total employed personnel – 1980 – 1996 – Selected Countries Country Germany Korea Singapore Brazil Source: Pochmann (2000)
1980 13,8 4,0 8,7 6,5
1996 31,5 14,4 24,9 7,6
4 - Conclusion It has been widely recognised that radical technological change based on information and communications technologies (ICTs) has far-reaching significance for developing countries. Their development and diffusion have provided the technical means for economic, institutional, and technological changes that are altering world-wide patterns of production, distribution, and competition. They are part and parcel of the globalisation process. Their efficient use is a necessary condition for developing countries to participate into the global economy. At the same time, the last two decades of the XX century —when their diffusion accelerated in the developed world—witnessed a dramatic increase in the gap between rich and poor countries. We live now in a more divided world, a world where OECD nations, Triadic17
grouping, Multinationals or whatever, constitute ‘a partially-integrated whole’ and a greater majority who are without, or excluded. Therefore, the recent developments based on ICTs present both threats and opportunities for developing countries. In one sense, the global interdependence in the economic sphere is accompanied not by a global, but rather by a “Triadic” interdependence in the technological sphere. In another sense, governments in industrialised countries are even more committed to policies that are promoting innovation and diffusion of new technologies. But more important for developing countries, one of the objectives of these new policies is to link technology to trade policies. From the point view of market access, even though multilateral agreements are apparently attempting to establish common international trade rules the reality is that two very distinct principles are at stake. The North-North bilateral and regional agreements have been increasingly dictated by a concept of “free trade”, whereby access to markets is dependent upon the effects it has in the economic structure of the recipient country/region. In North/South relations the “free trade” concept has been pushed further and concentrated on areas related to new technologies (such as intellectual property rights and services). This dichotomy means that protectionism and market liberalisation are treated unevenly in North-South relations. Very mature industries and core novel technologies are (sometimes implicitly) protected in the North while various forms of market access are sought in the South which, in turn, faces a different horizon of protectionist preferences, particularly those technology-related. There has been an upsurge of non-tariff trade barriers in advanced countries, especially on grounds such as health safety, environment, etc. This paper attempted to show that, in the case of Mercosur countries, the strategy of implementing liberalisation measures “per se” resulted in a very specific pattern of
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integration in the world economy. Countries are specialised in commodities with very low value-added and are losing ground on activities and areas close to the “knowledge economy”. It is not surprising that this has resulted in the deterioration in levels of poverty, unemployment and other typical underdevelopment characteristics (Lastres and Cassiolato 2000). What should be emphasised in this context is that the accelerating pace of change makes access to communication infrastructures even more important, and investment in local knowledge infrastructures has an even more vital role in breaking the vicious circles of underdevelopment (Lundvall and Borras, 1998, pag. 154). In this sense, there is a need to invest constantly in processes of learning of innovation (instead of allowing for their deterioration) and to implement public and private policies targeting the promotion of the capacity to acquire and use knowledge A last point to be made refers to the recognition that national and local may lead to different development paths and to a growing diversity instead of the standardisation and convergence suggested by the more radical thesis about the influence of globalisation on national and subnational policies. As emphasised by Celso Furtado, “globalisation is very far from conducting to the adoption of uniform policies. The mirage of a world behaving under the same rules dictated by a super FMI exists only in the imagination of some people. The disparities among economies are due not only to economic factors but, most importantly to diversity in cultural matrices and historical particularities” (1998, p. 74).
5 - Bibliography Aksoy, A. (1991) “Computers are not dynamos - frontiers in the diffusion of information technologies”, Futures, Vol. 23, No. 4, pp. 402-14. Albuquerque, E.(1998) “Patentes de invenção de residentes no Brasil (1980-1995): uma contribuição para o estudo da construção de um sistema nacional de inovação“. DPhil Thesis, , Instituo de Economia, IE/UFRJ, Rio de Janeiro. Allen, D. (1988) “New telecommunications services: network externalities and critical mass”,
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Telecommunications Policy, September, pp. 257-271. Antonelli, C. (1986) 'The international diffusion of new information technologies', Research Policy, Vol. 3, pp. 139-147. Botelho A. Dedrick, J., Kraemer, K. and Tigre, P. (1999) From industry protection to industral promotion, Crito, University of California, Irvine. Cano, W. (1999) “América Latina: do desenvolvimento ao neoliberalismo”. in J. Fiori (ed.) Estados e Moedas no Desenvolvimento das Nações, Vozes, Rio de Janeiro. Cassiolato, J. E. and Lastres, H. M. M. (2000) “Local systems of innovation in the Mercosur facing the challenge of the 1990s”, Industry and Innovation, forthcoming. Cassiolato, J. and Baptista, M. (1996) - ‘The Effects of the Brazilian Liberalisation of the IT Industry on Technological Capabilities of Local Firms’, Information Technology for Development, Vol. 7, N. 2. CEPAL (1999) Estudio Económico de America Latina, Santiago: CEPAL. David, P. (1990) “The dynamo and the computer: an historical perspective on the modern productivity paradox”, AEA Papers and Proceedings, Vol. 80, No. 2, pp. 355-61. Ernst, D. (1985) “Global competition and the worldwide restructuring of the electronics industry - implications for Brazil”, report to the Ministry of Science and Technology, Brasilia, Brazil. European Comission (1997), Le deuxième rapport Européen sur les Indicateurs Scientifiques et Technologiques, Brussels, European Comission. Freeman, C. (1995) “Information highways and social change”, mimeo IDRC. Freeman, C. and Soete, L. (1994) Work for All or Mass Unemplyment? Computerised
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Publishers, London Furtado, C. (1998) O Capitalismo Global, Paz e Terra, São Paulo. Georghiou, L. et al. (1986) Post-innovation Performance: Technological Development and Competition, The MacMillan Press, London. Hewitt, T. (1988) “Employment and skills in the electronics industry: the case of Brazil”, D. Phil. Thesis, Brighton: Institute of Development Studies, University of Sussex.
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Kaplinsky, R. (1988) “Industrial restructuring in LDCs: the role of information technology”, paper prepared for Conference of Technology Policy in the Americas, Stanford: Stanford University. Katz, N. and Shapiro, C., (1983) “Network externalities, competition and compatibility”, Discussion Paper, No. 54, Woodrow Wilson School, Princeton University, Princeton. Laplane, M, Suzigan, W. e Sarti, F. (1998) “Investimentos Estrangeiros Industriais e o Impacto na Balança Comercial Brasileira nos anos 90”, NEIT/Instituto de Economia, Unicamp, Campinas. Lastres, H. M. M. and Ferraz, J. C. (1999) “Economia da Informação, do Conhecimento e do Aprendizado”, in H.Lastres and S. Albagli (eds) Informação e Globalização na Era do Conhecimento. Campus, Rio de Janeiro. Lastres, H. M. M. and Albagli, S. (1999) Informação e Globalização na Era do Conhecimento, Campus, Rio de Janeiro. Lastres, H. M. M. (1993) “New Trends of Cooperative R&D Agreements: opportunities and challenges for Third World countries”, Estudo da Competitividade da Indústria Brasileira - ECIB, IE/Unicamp e IEI/UFRJ, Rio de Janeiro. Lundvall, B-Å. (1988) “Innovation as an interactive process: from user-producer interaction to the national system of innovation”, in G. Dosi et al. (eds.) Technical Change and Economic Theory, Pinter Publishers, London. Maldonado, J. (1999) “Tecno-globalismo e acesso ao conhecimento”, in H.Lastres and S. Albagli (eds) Informação e Globalização na Era do Conhecimento. Campus, Rio de Janeiro. Mansell, R. (1994) “A networked economy: unmasking the ‘globalisation’ thesis”, Telematics and Informatics, Vol. 11, No. 1, 25-43. Mortimore, M. (1999) “Contribuye la inversión estranjera directa al crescimento económico?”, Notas de la CEPAL, No. 5, Julho, p. 2. Narula, R. e Sadowski, B. (1998) “Technological catch-up and strategic technology partnering in developing countries”, International Journal of Technology Management, summer. Petit and Soete, L. (1998) “Is a biased technological change fueling dualism ?”, Paper presented at the AEA annual meeting, Chicago.
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Pochmann, M. (2000) Globalização e Emprego: o Brasil na nova divisão internacional do trabalho, CESIT, Instituto de Economia, UNICAMP, Campinas. Schmitz, H. e Cassiolato, J. E. (1992) Hi-tech for Industrial Development, Routledge, London.
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Table 4 - Strategies of MNCs in Latin America During the 1990s Corporate Strategy Sector Primary
Efficiency Seeking
Manufacturing
Auto: Mexico Electronics: Mexico, Caribbean Wearing Apparel: Mexico, Caribbean
Raw Materials Seeking
Market Seeking
Strategic Assets Seeking
Auto: Mercosur Chemicals: Brazil Agroindustry: Argentina, Brazil, Mexico Cement: Colombia, Venezuela, Dominican Republic Financial: Brazil, Mexico, Chile, Argentina, Venezuela, Colombia, Peru Telecom: Brazil, Argentina, Chile, Peru Retail: Brazil, Argentina, Mexico, Chile Electricity: Colombia, Brazil, Argentina and Central America Gas Distribution: Argentina, Chile, Colombia Tourism: Mexico, Caribbean
Auto Parts: Brazil Telecom Equip: Brazil
Oil/gas: Venezuela, Colombia, Argentina Minerals: Chile, Argentina, Peru
Services
Source: Cassiolato and Lastres 2000 (adapted from CEPAL 2000)
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