Cite and explain the structural changes that an economy undertakes as it goes through the process of development.

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The Structural Change Theory - An Analysis of Success and Failures of Technology John Stephen Agbenyo Faculty of Social Science, St. Paul's University, Kenya Abstract: - The key aim of this paper is to look at the role of lost or added to the object, some relations appear, disappear or technology in the structural change theory and to do an analysis change their form. In other words, SC imply changes in the of the success and the failures of technology within the context of object identity. the structural change theory. The paper begins by giving am overview of the structural change theory focusing on the Lewis The structural change theory focuses on the mechanism by Theory of Development which underdeveloped economies transform their domestic The paper cites two case studies of the introduction of one economic structures from a heavy emphasis on traditional technology or the other in an economy and how that has been subsistence agriculture to a more modern, more urbanized and sustainable or not more industrially diverse manufacturing and service economy. Keywords: Structural Change, Dual Economy, Technology, II. THE LEWIS THEORY OF DEVELOPMENT Development William Arthur Lewis was born on January 23, 1915 in the I. INTRODUCTION West Indies. In 1979 he was named a Nobel Prize winner in evelopment means different things to different people. Economics. This was in recognition of his works on economic D Development is multidimensional. It is a process that development and in particular developing a model on trade involves major changes in the social structures, attitudes and between developed and the less developed countries in institutions. It also involves the acceleration of economic relation to labour and productivity in agriculture. ("The growth, the reduction of inequality, and the eradication of Sveriges Riksbank Prize in Economic Sciences in Memory of poverty.(Todaro & Smith, 2012, p. 16) Alfred Nobel 1979,"). The concept of development has greatly informed public Between 1957-1963, he served as an Economic Adviser to the policy across the world. Development connotes "growth", Prime Minister of Ghana, Dr. Kwame Nkrumah. "progress", "increase". It is most commonly described as the In the late 1970s, there were visible changes in the socio- creation of jobs and wealth, and the improvement of quality of political world order. This led to a lot of interest in issues of life. It is a process that influences growth and restructuring of structural changes. Structural change theories primarily an economy to enhance the economic well being of a focused on the mechanism by which underdeveloped community. It is a set of changes that are interrelated to the economies transform their domestic economic structures from structure of an economy.(Moshe Syrquin & Chenery, 1989) a heavy emphasis on traditional subsistence agriculture to a The main goal of economic development is improving the more modern, more urbanized and more industrially diverse economic well being of a community through efforts that manufacturing and service economy.(Moshe Syrquin, 1988). entail job creation, job retention, tax base enhancements and Arthur Lewis has contributed greatly to the discussions on quality of life. Structural Change. His theory, the Arthur Lewis Structural The concept of development received close attention only Change theory tries to explain the growth of a developing after the end of World War Two. This attention led to various country in terms of labour transition between two sectors. As scholars researching into varied theories of development a result of this, his theory is sometimes also called the dual economic theory. It focuses on labour being transferred One of these theories is the structural change theory. between 2 sectors. According to Sewell, structure refers to any recurring pattern of social behaviour, or, more specifically, to the ordered The Agricultural Sector interrelationships between the different elements of a social This sector is also sometimes referred to as the subsistence, system or society. Social structure is generally agreed to be traditional or indigenes sector. In this sector, land is limited one of the most important but also most elusive concepts in and mainly has to do with agricultural produces such as crops, the social sciences (Sewell 1992). It is sometimes used to refer grains, etc. There is an unlimited supply of labour with low or to any observable ,.pattern" in social activities, and empirical sometimes even zero marginal productivity of additional researchers, for example, have referred to statistical. labour. Wage at this level is rated at the subsistence level Structural changes appear when some part or properties areThe Industrial Sector diffuses to those developing countries that have sufficient The modern, manufacturing or industrial sector on the other absorptive capacity to profit from global technological hand is said to be expansionary in nature. It is growing in change. For some countries technological change creates new nature. The main motive in this sector is to maximise profit by opportunities for catch up and even technological charging a price higher than the set wages. It focuses on more leapfrogging. Thus, rapid advances in communication and profits and higher wages. The wage that is provided under this information technology in the post-war period allow for the sector is higher than what is provided in the agricultural emergence of global production chains and the rapid sector. As a result, it serves as an incentive for the labour to outsourcing of large parts of manufacturing production to migrate from the agricultural sector to the industrial sector. developing countries. Structural Change therefore sees economic development as a Szirmai (2008) focuses on 3 propositions that influence set of interrelated structural changes. This mainly has to do success and failure in development. Two of these propositions with the move from being an under developedcountry to a that focus on technology are that; developed country. This requires a set of structural changes to 1. Technological change is generated in the leading sustain a continuing increase in income and social welfare" economies of the international economic order. (Chenery, 1982) 2. Developing countries that are able to absorb The agricultural sector plays a role in the GDP and internationally generated technologycan profit from employment of most developing countries. A prominent view the advantages of technological backwardness. They to understand the impact of agricultural technology in contrast can experienceaccelerated catch up. Countries that to agricultural productivity was contributed by Markus are not able to absorb technology will tend to fall Eberhardt and Dietrich Vollrath(Eberhardt & Vollrath, 2016) behind. using a simple model of the process of structural change and The paper opines that given the location of technological development. Technology plays a critical role. But to what advancement, catch up in the post-1950 globalised economy is extent has this been successful? only possible if developing countries develop the capabilities According to a UN working paper, technological to acquire, master and adapt international technology. There is advancement fuels productivity growth. (Szirmai, 2008, p. 9) not a single example of successful catch up since the The paper further opines that technological success is success latenineteenth century which did not involve tapping into that generates further success. "Once dynamic processes of international technology - e.g. Germany, Russia, Japan, economic and technological change have been set in motion, Korea, Singapore, Taiwan and Hong Kong, China and India. these mobilise and call forth new talents and resources, which The countries that, for some reason or other, are not able or contribute to further development(Szirmai, 2008, p. 9). not willing to tap into global technology flows, are the countries that are falling behind and are becoming Focusing on what is called the Asian Miracle or the Chinese marginalised in the world economy(Szirmai, 2008). Miracle, the paper opines that it is a misnomer. This is so because according to the paper, "very high growth rates are Case study I - Organic and Inorganic/Mechanized the normal pattern in a catch up process, where technological Agriculture backward countries can profit from international available By the end of the 19" century, there was a great technological technological knowledge without bearing the costs and risks influx that revolutionised food production. The invention and of developing new knowledge. If catch up takes place, it is use of farm machines, agrochemicals (pesticides, fertilizers, usually happens very rapidly. If not, then a country will weedicides), and hybrid seeds led to an increase in total food continue to fall behind"(Szirmai, 2008, p. 12). production globally.(Eberhardt & Vollrath, 2016) The per For the analysis of success and failure in long-run economic capita food produced in the world annually increased by 15 development, the paper focuses on the framework of percent over the past thirty-five years.(Rosset, 2000, pp. 203- proximate and ultimate sources of growth developed by 213) Countries that have adopted this mechanized system of among others Angus Maddison(1988). The proximate agriculture, have had their agricultural output increased by a sourcesof growth suggest ways in which countries can try to hundred-fold. For example, technological development in improve theirposition in the international technology and Agriculture led to an increase in farm output by 170% productivity race. Theproximate sourcesrefer to the directly between 1948-2015 in the United States, with just 2% of the measurable sources of growth of output such as capital population employed in the agricultural sector, compared to accumulation, embodied technological change, growth of Ghana's agricultural output (low mechanized and rain-fed labour input and human capital.(Szirmai, 2008, p. 13) method of farming), that continues to experience decline for the past 25 years, although it employs the highest percentage Changes in science and technology are among the ultimate of the population (44.7%).(Wang, 2018). The United States is sources of increases in productive capacity. The locus of such still one of the leading agricultural export as a result of its change is in the most advanced economies of the world mechanized system of farming adopted over 40 years ago. In economic order. From there technological change spreads and 2017, the country made an amount of $59.3 billion from www.rsisinternational.org Page 2agricultural export alone (United States Department of However, recent studies have shown some flaws in this Agriculture, 2018). In this situation, technological technology. intervention in the Agricultural sector have been successful. As of 2013, it is reported that globally, an estimated 142,000 Despite the successes indicated above, there is an extensive people have died from adverse effects of medical treatment, debate on the use of chemicals in food production and its up from 94,000 in 1990 (Vos et al., 2015). Medical imaging effects on health and on the environment as a whole (radiology), introduced in 1895 for diagnosing and treatment According to the World Health Organisation, (WHO), of diseases within the body has been attributed to increased globally, an estimated three million cases of pesticide longer-term risk effects of cancer, infertility and hair loss poisoning occur every year, resulting in an excess of 250,000 (WHO, 2016). deaths (WHO, 2004). Herbal medicine has been recommended for the treatment of Inorganic foods have been associated with increased incidence chronic disease such as diabetes, heart diseases, kidney of miscarriage, birth malfunctions, still births and delayed diseases and HIV/AIDS for which modern medicine is unable pregnancy (Ransom, 2002). Pesticides, herbicides and to (WHO, 2003; Mills et al., 2005; Zou et al., 2012). In China, fertilizers have been implicated in human studies with for example, herbal preparations account for 30%- 50% of the leukacmia, lymphoma, aplastic anaemia, soft tissue sarcoma total medicinal consumption, and largely recommended for and cancers of the breast, brain, prostate, testis and ovaries the treatment of patient's long ailments, chronic sore or (IARC,2015). fracture. In Ghana, Mali, Nigeria and Zambia, the first line of The International Agency for Research on Cancer (IARC) in treatment for 60 percent of children with high fever resulting its recent evaluation has found "sufficient" evidence of from malaria is the use of herbal medicines at home, with high carcinogenicity in eighteen Pesticides, herbicides and efficacy rate (WHO, 2003). fertilizers applied in food production. It is an undeniable fact that modern medicine has a significant Thus, the extensive use of chemicals and antibiotics in role in the treatment of large numbers of diseases. However, inorganic food production technology and the impact in all modern medicine had been flawed in the treatment of chronic three dimensions of sustainability has compelled the health- diseases. For example, the traditional African herbs conscious people to explore alternative method of food called Hypoxis and Sutherlandia have been recommended as production and support organic foods. (Kumar, Singh, herbal medicines for the treatment of HIV (Mills et al, 2005). Krishna, Anokhe, & Prakash, n.d., pp. 390-394) WHO therefore recommends the integration of traditional medicine and modern medicine to improve health outcomes? Several years ago, Africa was predominantly an organic agrarian economy. Mostly done on the subsistence level. Then III. FROM THE RURAL AGRICULTURE SOCIETY TO modernized agriculture was introduced. Africa gradually THE URBAN INDUSTRIAL SOCIETY developed huge appetite for modernized agriculture. The To propound on the basic sectors of development as explained rony however was that when so called developed countries in the Arthur Lewis structural change theory, we shall closely saw the need now for organic foods and started turning away look at the transition with technology as the primary backbone from the science-based farming in the 1980s, external and point of distinction between those countries that assistance for agriculture in poor countries was cut sharply. developed and those that were left behind. The U.S. Agency for International Development which was devoting 25% of its official development assistance to the The structural change had enormous dynamics in the shifting modernization of farming has today dropped its assistance to and transformation of an agricultural sector to an industrial just 1%. Years ago, nearly 30% of World Bank lending once industry .One of them is the productivity growth that went to agricultural modernization. Today, however, this has extensively affects workers. Thus these two industries operate been reduced to just 8%.(Paarlberg, 2008) in an open market economy with the income generation of industries being higher that the agricultural sector. Case study 2 -Herbal Medicine and Modern Medicine The same has been witnessed from an employment point of The birth of modern medicine is regarded as the most view; the agricultural sector generally under-employs workers significant technological invention in human history and it and bears a labour productivity which is null, this has of course indicates the enormous efforts of humans preventing death caused an instant transfer of workers to the more productive from cheating life. For example, the invention of vaccines industrial sector. Increased labour has an abrupt impact on represents the holy grail in modern medicine. The World profits eventually leading to a self-sustaining economy .The Health Organization estimates that vaccines prevent 2 to 3 transformation of modern economics is quite phenomenal million human deaths annually, and these numbers would according to Lin (2009) it has moved from the subsistence increase by at least 6 million if all children received the agriculture to the post industry, heavy industry, then the high recommended vaccination schedule (WHO, 2017). tech industry and finally a post industrialisation phase that Prevention, cure, longevity and well-being have been the boasts of a sustained growth as discussed already. This has trademark of contemporary medicine over the years.been the basis of the evolution and success of technology and technology to be made easier by the expansion of markets in can be summarised into: these countries and a positive attitude towards the dynamics 1. Technical innovations leading to improved quality associated to technology (Loo, 1999). and lower production costs in accommodating labor. IV. TECHNOLOGICAL INVENTIONS AND ECONOMIC 2. A dynamic industrial change process which is GROWTH inclusionary of the development of different goods and services produce continuously. Now that we have thoroughly assessed the transformation of the economy from a tradition focused agricultural sector to the To get a better understanding of this shift we must first modern manufacturing empire. We must delve deeper into the analyse the sequence of structural change and specifically the role that technology has played and to be specific, how manufacturing industry since it's the "urban one", this is technological innovations have been a successful hit in subsequently related to the changing structures of driving the economic growth bandwagon. Innovations have infrastructure which wholly denotes the role and success of enabled enterprises to differentiate, give rise to imperfect technology. The sequence involves: competition and broaden the market sharing economy. i. The transition from primary and light industry (Zalewski and Skawinska ,2009)). The modern technological sectors to large scale processing industries such as landscape has been pushed to automation and artificial cement. intelligence, so it is only right to focus on how these will 11. The emergence of the capital goods sector and its improve the growing economy of nations transformation into a key sector So far technological innovations have transformed society and ini, The emergence of high technology industries increased labour productivity in the following ways. These three proponents undeniably form a unifying mutual 1. Replacing workers with machines hence cutting relationship on each other. For example the high technology down on cost and producing better and qualified phase takes place after a capital sector has been well output developed and these two eventually amount to the transition to 2. Boosting existing workers by supplying them with large scale processing .This sequence has been highly better and faster tools acclaimed and successful in the economic development of 3. Giving rise to a bigger technological driven industry. countries like South Korea, India and Brazil (Justman and Teubal, 1991). This has definitely has a ground breaking improvement in the structural change developed by Arthur Lewis the main sector This paper has highly stressed the component of an economic has now been fully transformed into a modern one. growth to an increasing labour force bringing intangible capital through their skills, as opposed to the neoclassical V. CONCLUSION perspective which mainly emphasised on the accumulation of The concept of development has greatly informed public physical capital. It has so far been successful generating policy across the world. Development It has been defined in business opportunities and new sources of inputs (Justman terms of the quantitative increase in the economy of a country and Teubal, 1991). This can be correlated with the concept of with an aim to achieving consistent rates of growth of income proximate, intermediate and ultimate sources of growth to per capita further analyse the role technology has played .Some countries have heavily adapted to the technological race that Th structural change module which have primarily focused on has waged an economical growth rate for centuries, however the mechanism by which underdeveloped economies technology cannot always improve the structure of a country transform their domestic economic structures from a heavy unless it is accompanied by these proximate sources and that emphasis on traditional subsistence agriculture to a modern, brings us to some of the inevitable failures of technology. The urbanized, and more industrially diverse manufacturing and most obvious fact has been the dynamic shift caused by service economy can be put to test. technology from a laborforce oriented economy to an As can be clearly gleaned from the two case studies above, unemployed one, which many people opting out of the while the movement from a heavy emphasis on traditional economic growth to seek employment elsewhere . This has led subsistence agriculture to a more modern, more urbanized and to a subsequent wave of brain drain more industrially diverse manufacturing and service economy The second problem has been transferring technology from an with technology at the heart, the introduction of technology economic sustainable country like United States, China, and per se in changing the structure of an economy does not mean Korea to the developing countries. Furthermore the crippling success or sustainability for the said economy. On the other investments needed to explore technological advancements hand, the myth of indigenous technology suggests that there that will push the modern manufacturing sector forward are a exists what is called "appropriate, indigenous technology" hindrance. The agricultural sector is the main driving force in which is more adapted to the needs and traditions of most developing countries so it is only right for the transfer of developing countries. These technologies are mainly small scale, environmentally friendly, integrated into traditional www.rsisinternational.org Page 4culture, etc and thus most likely not provide the momentum (5) Lin, Y, J. (2009) Economic Development and Structural Change. for growth and leapfrogging that is required to lift millions of The World Bank.1-14. people out of poverty. [6] Paarlberg, R. (2008, February 29). Africa's organic farms. The New York Times. 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