Technical change and the new context for development

(1994) “Technical change and the new context for development” in Mytelka, L. ed.,
South-South Co-Operation in a Global Perspective, Paris: OECD, pp. 55-87

Context

By 1994, the Berlin Wall had fallen and the world was experiencing a wave of political and institutional change, from the movement towards trade liberalisation and the global adoption of market systems to the emergence of new national economic powers and the creation of regional blocs in every continent. By this point, too, the early diffusion of the ICT revolution was beginning to have a noticeable impact on products, production, services and communication, with a parallel shift in organizational practices and norms. Written for the OECD, this book chapter focuses on the ways in which these technical and organizational innovations have changed the context for development strategies – and consequently for any complementary actions in terms of cooperation between countries.

Building on her existing analysis of technical change and the historical requisites for successful transitions, this prescriptive take on development strategy remains instructive for policymakers today; in fact, many of the recommended strategies have since been implemented to a degree as the ICT paradigm has diffused, in response to the changing context that Perez already recognized. These include an emphasis on human capital: the need for development policies to build on a participatory framework, and the importance of putting education and training at their core. Investment in technological capability is also highlighted, with Perez predicting the role that networks of collaboration now play in both national innovation strategies and business-led global value chains. And at a time when the ‘resource curse’ was still generally accepted in development policy, she stresses the increasing value of natural resources to the developing countries as ICT-enabled markets segment and specialize – value that is slowly being acknowledged and which remains a factor in her argument today for the necessity and possibility of full global development. (see her 2014 paper in the 2010-today section: “The new context for industrializing around natural resources: an opportunity for Latin America (and other resource rich countries)?”)

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