Technology Choice in Developing Countries : The Textile and Pulp and Paper Industries

A developing country's choice of an appropriate technology from among those available for use in a particular industry is critical: alternative technological strategies that involve varying mixes of capital, labor, and social costs could have significantly different impacts not only on the industry but also on the country itself, especially one whose industrial base is restricted. This book presents one of the first empirical studies in this area.

Recent choices of manufacturing equipment procured by a sample of firms in Colombia, Brazil, the Philippines, and Indonesia are the focus of the study, although a few plants in the US and Japan are also included for comparative purposes. These firms are engaged in the spinning and weaving of short fibers (cotton and synthetics) or in the sulfate pulping of wood and paper making. Since both Latin American and Asian experiences are reviewed and both a mechanical and a chemical process industry are treated, the findings are relevant to other countries and other industries.

Amsalem's methodology for evaluating alternative technologies goes beyond the consideration of two factors of production (capital-labor ratios). It enables him to factor in differences in labor skills and productivity, the varying efficiencies of machine utilization, levels of energy intensity appropriate to an industry, plant requirements, and market and social costs. The book also examines the effects of government policies and incentives on the decision processes that culminate in a choice among competing technologies.

Michel A. Amsalem is currently affiliated with the Graduate School of Business, Columbia University.