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Lecture Development economics - Lecture 17: Technological Dualism

Professor Higgins has developed the theory of Technological Dualism. "The use of different production functions in the advance sector and in the traditional sectors of UDCs". The existence of such dualism has increased the problem of structural or technological unemployment in the industrial sector and disguised unemployment in the rural sector. | Technological Dualism Lecture 17 Definition and Explanation: Professor Higgins has developed the theory of Technological Dualism. "The use of different production functions in the advance sector and in the traditional sectors of UDCs". Explanation The existence of such dualism has increased the problem of structural or technological unemployment in the industrial sector and disguised unemployment in the rural sector. Higgins theory of technological dualism incorporates the factor proportion problem as discussed by K.S. Eckaus, which is related to limited productive employment opportunities found in the two sectors of a UDCs because of market imperfections, different factor endowments and different production functions. The UDCs are characterized with structural disequilibrium at the factor level. This arises, because a single factor gets different returns in different uses or because price relationship among factors are out of line with factor availabilities. Such disequilibrium leads to unemployment or underemployment in two ways. It is as: (i) Imperfection of price system. (ii) Structure of demand which results in surplus labor in overpopulated backward country. Thus the technological unemployment in UDCs is because of surplus labor which results from misallocation of resources and structure of demand. Higgins constructed his theory by assuming two goods; two factors and two sectors and their factor endowments and production functions. Of these two sectors the industrial sector is engaged in plantation, mines, oil field and large scale industry. It is capital intensive and characterized by fixed technical coefficients that is, the factors have to be combined in a fixed proportions. While the rural sector is engaged in producing food stuffs, handicrafts and very small industries. It has changeable technical coefficients of production. Hence it has different alternative combinations of labor and capital. The production functions in the industrial sector are . | Technological Dualism Lecture 17 Definition and Explanation: Professor Higgins has developed the theory of Technological Dualism. "The use of different production functions in the advance sector and in the traditional sectors of UDCs". Explanation The existence of such dualism has increased the problem of structural or technological unemployment in the industrial sector and disguised unemployment in the rural sector. Higgins theory of technological dualism incorporates the factor proportion problem as discussed by K.S. Eckaus, which is related to limited productive employment opportunities found in the two sectors of a UDCs because of market imperfections, different factor endowments and different production functions. The UDCs are characterized with structural disequilibrium at the factor level. This arises, because a single factor gets different returns in different uses or because price relationship among factors are out of line with factor availabilities. Such disequilibrium .