Chapter 20: Problem 10

What are the "advantages of backwardness" for economic growth?

Short Answer

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The "advantages of backwardness" for economic growth are that less developed countries can benefit from technology transfer, leapfrogging, lower initial investment, and an abundance of labour. This enables these countries to quickly catch up with more developed economies by adopting existing technologies, skipping certain development stages, investing efficiently, and utilizing their large workforce.

Step by step solution

Introduction

The concept of "advantages of backwardness" posits that less developed countries can benefit from their current status and turn it into an opportunity for faster economic growth. In this context, "backward" refers to countries that are economically behind the developed world, in terms of industrialization, technology, and infrastructure. There are several advantages that can help these countries to quickly catch up with other countries.

Advantage 1: Technology Transfer

One of the main advantages of being backward is the opportunity to adopt and implement already existing and proven technologies from advanced countries. This is referred to as technology transfer. Instead of investing time and resources in developing new technology, less developed countries can access existing innovations and quickly make technological progress.

Advantage 2: The Ability to Leapfrog

In many cases, less developed countries can skip certain stages of development that advanced countries had to pass through. For example, in telecommunications, many countries have bypassed the need for extensive landline networks and have directly transitioned to mobile technology. This process is called leapfrogging and allows for less developed countries to rapidly adopt new technology and reduce the gap between them and advanced countries.

Advantage 3: Lower Initial Investment

In some cases, a country that is in the early stages of development faces lower initial investment costs. They can build new infrastructure using the most advanced techniques and materials from the beginning, without having to face the costs of replacing or upgrading older systems. This enables them to save resources and invest in other sectors of the economy, thus promoting faster growth.

Advantage 4: Abundance of Labour

Less developed countries often possess an abundant supply of labour. Their expanding population provides a vast workforce that can be employed in various sectors of the economy and stimulate growth. In addition, a large population enables these countries to potentially benefit from the economies of scale, which can lead to lower costs and increased competitiveness in the long run.

Conclusion

In summary, the "advantages of backwardness" are significant for countries that are in the early stages of development. These advantages include technology transfer, ability to leapfrog, lower initial investment, and an abundance of labour. By capitalizing on these advantages, less developed countries can potentially achieve rapid economic growth and catch up with the more advanced economies.

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