David Jefferies' home pages, and background to this book.
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ENGINEERING FOR DEVELOPMENT
(First Draft)
E J Jefferies
March 1969
CONTENTS
PART 1 THE WORLD DEVELOPMENT PROGRAMME
Chapter
1 Introduction
Chapter
2 Closing the Gap
Chapter
3 Resistance to Change
Chapter
4 International Technical Assistance
PART II AN ENGINEERING APPROACH TO A PLAN FOR A COUNTRY
Chapter
5 Outline of the Approach
Chapter
6 Setting the Problem
Chapter
7 Basic, Concepts, Terms and Definitions
Chapter
8 Background Data Available
Chapter
9 The Starting Point for a Case Study
Chapter
10 Preliminary Calculations
Chapter
11 Patterns of Economic Growth
Chapter
12 Development Plan for Year 1
Chapter
13 Development Plan for Year 2
Chapter
14 Development Plan for Year 3
Chapter
15 Review of Changes During the Three Years
Chapter
16 The Control of Development
Chapter
17 Financing the Development
PART III THE
IMPLICATIONS OF RAPID GROWTH
Chapter
18 Economic Growth and Technological Changes in Rural Communities
Chapter
19 The Influence of Agriculture on Industrial Development
Chapter
20 The Role of Manufacturing Industry
Chapter
21 The Contribution of Industrial Engineering to a Solution
PART IV DESIGNING FOR BALANCE IN DEVELOPMENT
Chapter
22 The Prediction of New Manufacturing Capacity Requirements by
Product Group
Chapter
23 The Productivity of Labour
Chapter
24 The Growth of Productivity
Chapter
25 The Calculation of Appropriate Levels of Productivity in New
Plants
CHAPTER 1
INTRODUCTION
1.1 One of the major problems facing world politics in the coming decades will be to reduce the economic and technological gap which at present differentiates the nations of the world into two groups with fundamentally different and diverging standards of living. As we approach the end of the "United Nations Development Decade" it becomes clearer that the methods which are currently being applied to solve this problem have been ineffective. In very simplified terms these methods consist of a two-pronged attack:
In general this two-pronged attack has been mounted from outside by the more advanced countries, albeit at the request or with the consent of the developing country in question. With practically no exception, the programmes have automatically been designed in the first place to benefit, or at least not to damage, the economy of the more advanced country concerned. The publicity attending such programmes has overshadowed the less spectacular efforts made within the developing countries themselves, although these have often produced more concrete and lasting results. The overall advance achieved in some twenty years has been very small; in fact it is open to question whether this small advance has not been achieved in spite of the external development effort, rather than as a result of it.
1.2 A different line of approach was taken up by the developing nations themselves with the formation of the United Nations Commission on Trade and Development in 1963. The logic behind this from the developing countries’ point of view is fairly clear. The first approach tried was based on the observation that the advanced countries have large industrial sectors. Therefore: "give us industries and we shall advance".
This having been tried and found wanting, a second observation was made: that advanced countries depend on international trade. Therefore: "improve our international trade and we shall advance". Both of these theorems put the cart before the horse; the large industrial sectors and the extensive international trade of the advanced countries are a result, not a cause, of their original impetus to advance. The origins of the necessary initial impetus have not yet been identified. It is clear that no common macro-economic factor was predominant in initiating a rising standard of living in all those countries which now rank as "advanced". The key must be sought in the structure of society and in a qualitative change in a significant fractions of its individuals. (This has led in the last few years to considerable, and perhaps equally misguided, emphasis in "Aid" programmes on technical education as a key to development.) Present indications are that the most likely common factor was the emergence of a sufficient number of individuals with a capacity for innovation in the face very often of considerable resistance. In this case the keys are to be found in social and cultural development.
1.3 The study of socio-economics, that is the inter-relationships between social development, the psychology of individual economic activities and macro-economic growth, has not yet emerged as an exact science. It is still in the observational, data-collecting and hypothesis-forming stage; no general "laws" have yet emerged. Much effort has been expended by economists in the last twenty-five years on the accumulation and correlation of data on the performance of productive undertakings, especially industry; on the relationships between output and the use of capital and labour; on the growth of technology and "productivity"; and on the effects of a wide range of "regulators" which have been applied by governments from time to time to encourage a steady, non-cyclic rate of overall growth of output. Most of this accumulation of knowledge has been expressed in terms invented within individual disciplines, especially that of economics, which are unfamiliar and often incomprehensible within other disciplines. This applies especially to those disciplines concerned with the actions necessary to establish new productive capacities, the forecasting of markets for new individual undertakings; the engineering of equipment and facilities; the social design of their labour forces; and the appraisal of profitability. These actions are carried out by individuals or small groups of individuals from a wide range of motivations on the basis of a small amount of knowledge and a large amount of assumption. The assumptions derive from the social, cultural, educational and ethical background of the individuals and are therefore much more related to the past than to the future. On the whole the element of assumption in the design of new investment outweighs the element of knowledge in determining the economic performance of each innovation. The combined effect of a large number of such innovations determines the future course of the economy as a whole which is thus conditioned by assumptions appropriate to the past rather than to the future and rapid economic and social development is thereby inhibited.
1.4 Thus the ideal role of the science of economics in relation to the promotion of future economic growth should be to provide the best guidance possible to the group of "innovation designers" on the bases for the assumptions about the future which they must necessarily include in their projects. Such assumptions are at present normally derived from historical data, political and social theories, cultural backgrounds and currently fashionable modes of thought, or some combination of these. They are made individually by each innovation designer or group, and in the absence of any "polarisation" will tend to be oriented randomly and a large number of such randomly-based innovations will tend to cancel each other out and produce little or no net resultant in the sense of growth of the economy as a whole.
1.5 Thus one point in the economic system at which it is possible to inject a bias towards the direction and rate of economic growth appropriate to some point in the near future is in the design of innovation via the assumptions which are inevitably made by the innovation designers about economic conditions and balances to be hoped for during the working life of a new undertaking. The problem involved in arranging such an injection is twofold:
Firstly: to define the development we are aiming to promote, together with the terms in which it can be measured and their quantitive values appropriate to a series of future years; and the constraints within which the development must take place in order to maintain its balance.
Secondly: to determine the design and selection criteria which will be effective in providing bias in the combined results of a large number of individual economic innovations in each sector of the economy, so that the total effect is aimed in the required directions and proceeds at the required rates.
1.6 This independent and potentially controllable variable has so far been ignored by economic analysts interested in the relationships between technological and economic development. It is commonly assumed that the economic performance, especially of capital, is autonomously determined in some way and that past levels and trends of performance must continue into the future. It is also assumed implicitly that consumption can be left to be determined by production either through market forces or through centralised state controls. In either case, however, a rise or fall in final private consumption now will tend to determine (via the design assumptions referred to above) the level of production several years hence, with a time-lag proportional to the gestation period for new investment. This tends to produce cyclic variation in economic activity, or to the suppression of such variation by restrictions on high levels of private consumption. Both of these effects can be avoided by operating on the design data assumed in the planning of innovations, in accordance with the requirements of a planned economic growth.
1.7 Within the last twenty-five years a method has been developed by economists of comparing the average "Standards of Living" of people in different countries by measuring their output and consumption of goods and services in terms of money adjusted to an international standard. These terms are: GROSS DOMESTIC PRODUCT (GDP) at market prices of the country, which is the total of the "Net Product" or "Value Added" of all economic activities. Net product of an activity is defined as the "Gross Product" or value of sales less the cost of all raw materials, goods and services purchased and used in making the gross product. GROSS NATIONAL PRODUCT (GNP) at market prices of the country, which is the GDP plus net income from foreign trade and transactions.
1.8 It is of course open to argument whether the measurement of growth of total consumption in money terms by reference to the increase in GDP or GNP is an adequate or accurate measure of the increase in general well-being of the people of a country. It may be that long-term research would show that this purely economic measurement could be modified by including quantitative terms related to certain aspects of social conditions in the country. However, in the absence of such research we must for the time being accept that an overall increase in economic activity measured by an increase in GDP, or rather by an increase in GDP per capita, is a measure of increased standard of living in a country and is a sufficient target in itself in our search for "Accelerated Development". This assumes that the social and political organisation of the country in question contains sufficient built-in safeguards to limit the development of structural and regional inequalities.
1.9 We must also accept that economic development has to be paid for by certain social and political changes. Social changes may include: higher average levels and wider dispersion of literacy, education and communication and the personal effort needed to make these possible; more concentrated and continuous work loads in all activities to reinforce outputs and eliminate losses. Political changes may include: greater dispersal of authority and responsibility; wider dissemination of information and the development of feed-back systems; reduction of time-lags in policy formulation and execution. It will be possible towards the end of our present study to determine more precisely the nature of some of these changes and possibly their magnitudes. The built-in resistances (which exist in any society) to such changes must not be under-estimated.