Proven technology policy risks development progression

Technology finds paramount importance in economic development discourse for reaching high-income status. But should less developed countries focus on leveraging proven technologies or unproven possibilities of emerging ones? Often, such a fundamental question creates a policy dilemma, leading to the continuation of past policies. Historically, upon citing the risk of emerging technologies, most less developed countries opted for proven, matured technologies. Even countries aspiring to reach high-income status have continued the policy of supporting proven technology adoption. But by pursuing the policy of taking advantage of apparently risk-free proven technologies, are less developed countries risking their development progression? To figure out the answer, we need to dig down the role of technology in creating economic value.
The first purpose of technology is to facilitate economic value creation out of labour and natural resources. For example, technology empowers us to explore, extract, and refine natural resource deposits, such as oil, gas and minerals. Adopting matured technology through import appears to be a risk-free option for a technology-poor country. Similarly, importing matured technologies to empower low-skilled labour to contribute to manufacturing, both for local consumption and export, sounds like a prudent option. Of course, by importing proven technologies, less developed countries created a market for their natural resources and labour.
Furthermore, by importing matured technologies, these countries have succeeded in improving their transport, power, energy, and communication infrastructure, among others. Consequentially, they have experienced economic growth. Even a few natural resource-poor countries like Bangladesh have reached low-middle-income status by commercialising low-skilled labour by importing proven technologies. But will such a policy of importing matured technology sustain economic growth in helping them meet their aspiration, like reaching high-income status?
Upon reaching low middle-income status, natural resource-poor countries like Bangladesh have exhausted most of their growth potential. More or less, the low-skilled labour surplus force has dried up. Consequently, productive activities like farming have started to suffer from labour shortages. Although debt-driven technology import agenda for uplifting surface, water, and air transportation, energy and power supply, healthcare and public service delivery, classrooms with computers, and data connectivity with fibre optics network has shown short-run GDP growth, signs of slowing down have started to surface. In addition to growing debt repayment obligation, such technology import agenda has been running the risk of failing to generate profitable returns from technology import in the low-skilled labour-centric economy.
Furthermore, the knowledge acquired by many graduates has been facing the reality of growing irrelevance. It has been happening because imported matured technologies demand decreasing knowledge and skill to install, operate, and maintain them. For example, a same-capacity contemporary power plant requires far fewer engineers and technicians than it needed in the 1980s. It has been true in all areas, from telecom networks to ready-made garment manufacturing. Such a reality raises the question of the relevance of education in driving economic growth if low middle-income countries keep pursuing the policy of importing proven technology.
With the given trend of relying on importing seemingly risk-free matured technologies, less developed countries have been seriously risking their development progression, as it keeps eroding the scope of leveraging education for economic growth. Hence, what could be the alternative? Let's draw lessons from basics and examples to clarify this vital issue.
Technology creates economic value through three significant means: usage, replication, and advancement. The scope of leveraging education by increasing usage and replication of proven imported technologies has been falling as technology developers have been increasingly integrating knowledge and ideas in subsequent releases, demanding less of it later. Consequently, countries engaged in advancing and exporting technologies have been expanding the scope of leveraging education while eroding it among technology-importing less developed countries. Besides, due to the growing complexity of technology advancement, technology-exporting countries have been experiencing exponential demand for high-calibre graduates. Hence, despite growing unemployment among science and engineering graduates in less developed countries, technology-exporting countries have been facing a growing shortage of them. Therefore, to create an education market, the policy of technology importing should graduate to technology advancement. However, should less developed countries focus on improving proven or unproven emerging ones?
In the race to profit from advanced technologies, there has been a high entry barrier due to a monopolistic position in the proven technology market. Hence, less developed countries should focus on unproven emerging ones. But what about the risk? The success relies upon managing risk in creating and exploiting the window of advancing emerging technology with local production of knowledge and ideas. For example, upon gaining significant success in manufacturing internal combustion engine-based automobiles, China could not open the window to generate economic value from local knowledge of the underlying proven technologies. Hence, China embarked on pursuing unproven emerging technology, electric vehicles. China opted for advancing emerging lithium-ion battery technology instead of making copies of proven technologies. As a result, China has succeeded in creating the market of the capability of its growing number of graduates to produce knowledge and ideas for advancing electric vehicles. Creating success through the uplifting policy of adopting or replicating imported proven technology to advancing emerging technology through local knowledge and idea production is at the core of sustaining economic value creation for reaching high-income status.
So far, less developed countries have driven economic growth by adopting and making copies of proven technologies to create a market for natural resources and labour. However, natural resource-poor countries like Bangladesh can no longer sustain growth upon reaching low middle-income status. Their next frontier of development demands unlocking the window of creating economic value from the local production of knowledge and ideas. To address this urgency, they must change the policy of adopting proven imported technologies to leveraging emerging ones. They must focus on managing risk in advancing emerging technologies to create the demand for local production of knowledge ideas. Unless they graduate from the policy of importing proven technology to advancing risky emerging technology, their graduate unemployment will be growing, and development progression will be slowing down.

M. Rokonuzzaman, Ph.D is academic and researcher on technology, innovation and policy. zaman.rokon.bd@gmail.com