patenting the sun; Sachs on the very poor

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Mon Aug 16 14:29:14 PDT 1999

Based on 1991 data from the European Commission in 1994:

R&D spending in dollars per million population

High income countries: 218 Asian NIES: 108 Middle income (exc. 6

Russian Federtion) Russian Federation: 29 Low income (exc. 01


The World Bank "Knowledge for Development" 1998/9 report notes these disparities in a graph on the opening pages, but hardly recognizes the problems Sachs has probed here and Ken Silverstein in a recent *Nation* piece (the development economist Keith Griffin wrote a very thought provoking essay on the role of R&D in the transmssion of intl inequality in 1971--worth finding). The WB goes on to talk about the necessity of TRIPS, how to more quickly assimilate the knowledge produced abroad, etc.

One should also not be misled by the high R& D of the NIE/C's, often taken as proof of the open possibilities in the world market. The function of R&D here is to assimilate innovations as embodied in the most knowledge intensive capital goods produced in Japan and the US. Leading edge R&D never shifted to the NICS.

As Tamio Hattori notes in "Economic Development and Technology Accumulation: Experience of South Korea", Economic and Political Weekly May 29, 1999:

"Korean industrialisation...depended for mfg technology and skill on the import of new machines instead of accumulating them and depending on their own workers an dorganisations. In others wrods, Korea nad other developing countries did not have enough time to train workers in rapidly advancing industrial technology. To buy and to use new machines means not only saving time, but also acquiring high level technology that is contianed in the new machines themselves. From the companies point of view, to buy new machines is easier than to train workers. ALso, companies can keep workers as unskilled labour which is cheaper than skilled labour. For produciton ptechynology, Korea depended upon new more precise machines. The funds to by new machines came partly from the govt under the natl strategy of export oriented industrialisation policy. Frequently, the proportion of vintage machines in a Korean factory is less than in the Japanese factory. Although it was the source of Korea's competitiveness compared to Japan or other countries, it means that companies had to continuously replace their production lines. As a result of this strategy, the companies' financial structures worsened due to overinvestment. Also this pattern inevitably increased import dependence."

Even though Korea's R&D expenditure rose from .4% of GNP in 1965 to 2.7% in 1995--almost the same level as US, Japan, and Germany--Korea continued to import a huge volume of technology from abroad. In the 1990s Korea paid over US$ 1 billion for every year, and the export/import ratio remained less than 10%. In the case of basic memory production, many materials, sophisticated automatic machines, air filters are imported and price warfare is unchecked.

The global centralisation of innovative R&D is surely grotesquely ignored in contemporary social science. Sachs' efforts are much appreciated.

Yours, RNB

More information about the lbo-talk mailing list