★ PEOPLES ★ INDUSTRY NOTEBOOK (PRACTICAL ELECTRONICS) ★ |
| Industry Notebook (Practical Electronics) |
ELECTRONICS AND THE THIRD WORLD The large pool of low-cost labour in the Far East has worked to the benefit of the UK electronics industry, but this situation may change dramatically as South East Asia's own industries become established THE highly successful Amstrad business is often held up as an example of what can be done in flagging old Britain in the field of consumer electronics goods. Undoubtedly much of this success is due to the marketing skills of Alan Sugar, the founder. But another very important factor is that Amstrad does most of its manufacturing in the Far East (e.g. South Korea) where labour costs are much lower than in the UK and Europe generally. Of course, this is a well known strategy which has been used by other British electronics firms for a good many years. Amstrad's outstanding business success has simply highlighted it. When Sir Clive Sinclair (whose earlier computer business was bought up by Amstrad) was television's favourite pundit on science and technology, he used to argue for a permanent relationship of this kind. He would say that Britain is strong in basic research and invention but weak in the application of these mental products to manufacturing and marketing. We are good at generating ideas but not in exploiting them for profit. So why not make the UK a kind of R&D centre -which would live basically by selling its brainpower through licences, royalties etc. - while other countries, notably those of the Third World, would benefit from producing and selling the resulting hardware. But whether this would fit in with the present situation is somewhat doubtful. America, Japan and West Germany are the leading industrial nations because they not only produce good research and inventions but the technology to exploit them as well. Everyone else follows in their wake, though not without making contributions to the total body of knowledge. The overall picture, however, is one in which the industrialised countries - broadly the OECD group - generate the technology and monopolise it. They call the shots, while the Third World is in a position of dependence. It's all very fine for the richer nations, but this technological imbalance makes the present world economy work to the permanent disadvantage of the developing countries. And this is morally, socially and economically bad for everyone. The famous Brandt Report (‘North - South: a programme for survival') pointed out the dangers in some detail several years ago. So in our discussion of the effects of the electronics industry on society it makes good sense to explore what is happening in the Third World countries where electronics is just beginning to have an impact on people's lives. The fact that some of the people in the poorer countries can now buy radio or tv sets, pocket calculators, digital watches and the like is not very significant. It is a highly marginal change in awareness relative to experience of the brute facts of living in poverty, sometimes near to starvation. If electronics has any significance at all it must be the underlying effect of this technology on industrial production, capital accumulation and economic development. Economists, industrialists and business people have traditionally held the view that because the Third World has huge populations and enormous pools of unemployed labour it should naturally adopt labour-intensive methods of production. Of course, this does in fact happen and the still tremendous competition for jobs drives the price of labour downwards. Hence the availability of sources of cheap labour for European companies such as Amstrad. And in saying ‘cheap' I don't mean to imply poor quality, because the labour is often both cheaper and better than that available on the European market. But this assessment, although it represents the current situation, is faulty in the long term. First of all there is no reason to suppose that governments and industrialists in the Third World would want to see their people as a permanent pool of cheap labour for the richer nations, thus perpetuating the present dependence of the South on the North. It's bad enough to be forced into this dependence by economic necessity without voluntarily choosing it as a way of life. Secondly, the traditional view is based on the concept of the quantity of labour and its laws of supply and demand. It doesn't take into account the qualitative change that is occurring in industrial production. High technology, led by electronics and computers, is being used, as discussed last month, not primarily to reduce labour requirements but to improve the overall efficiency of production and the quality of manufactured goods. If the developing nations are going to compete effectively with the richer ones they must utilise the new electronics-based technology for similar purposes-and in fact are already beginning to do so. As their labour is cheap anyway, there is relatively more incentive for them to use the new production technology to improve efficiency and competitiveness than simply to save on labour costs. So how will the Third World deal with its vast unemployment problem? Already the manufacturing industries of the developing countries are unable to absorb the steadily increasing labour force resulting from the growth of their populations. One possibility would be to expand employment in agriculture. Although this would be going in the opposite direction to what happened in the European and American industrial revolution, it does make sense in the light of the new, automated production technology in manufacturing industries. Work in agriculture doesn't require the speed, accuracy, unflagging attention and precise measurement and control that are nowadays demanded by manufacturing production. Its rhythm is slower, in synchronism with the seasons and hence more suited to human abilities. PE, TOM IVALL
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