Threats and promises of microelectronics

Press, 14 May 1982, Page 12

Threats and promises of microelectronics

By

RORY JOHNSTON

in “The Guardian,” London

Poorer nations of the world are commonly referred to by the euphemism “developing countries” with the assumption that sooner or later they will succeed in improving their lot substantially by industrialisation. Recently, however, has come a stern warning from a Third World economist that new microelectronic techniques are threatening to wipe out the one competitive advantage developing countries have in world trade: their low labour costs. Dr Juan Rada is a Chilean working at the International Management Institute in Geneva. At a recent meeting of the Club of Rome, held to launch the Club’s latest report, “Microelectronics and Society — for Better or for Worse,” he declared: "All the indications are that it is for worse.” A small but significant sector of the world market for manufactured goods has been captured by developing countries over the years, with rather spectacular gains in "newly industrialised coun-

tries" such as Korea and Malaysia, where many of the world's consumer electronic goods, and virtually all its microchips are assembled. All these achievements, says Dr Rada, are threatened by the introduction of automation into factories in developed countries, bypassing high wage rates and eliminating the factor the poorer countries have in their favour. Over-all, it would seem that change is already beginning to bite. In 1975, a United Nations conference in Lima resolved that the Third World’s share of world industrial output should rise from 7 per cent to at least 25 per cent by the year 2000. By 1980 this figure had hardly reached 9 per cent. Dr Rada is far from being totally pessimistic, however. He sees microelectrics as providing developing countries with plenty of opportunities: for instance, the acquisition from the North of sophisticated machines with knowhow "builtin” provides a way of importing much needed skills quickly.

He calls on Third World Governments to devise a coordinated policy on information, tackling such issues as North-South data flows, satellite links, and transfer of technology. They should press for preferential access to data banks, and should set up their own data banks, in such areas as traditional medicine, and in Third World languages. The Intergovernmental Bureau of Informatics, an offshoot of U.N.E.5.C.0., has already launched a programme to raise $lOOO millions to promote Third World information technology. In Venezuela, farmers are collecting weather data and sending it in to a central computer. There it is processed, and advice is sent back to farmers on when to sow, reap, dry crops, and so on. Results so far indicate that food production could be boosted by 30 per cent. Whether the benefits from the technology will eventually outweigh the harm to the Third World, is anvhodv’s guess.