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The region and the global historical setting
Post-second world war geopolitics
New
technologies
The study
Notes
The Asian region is home to several ancient sophisticated civilizations and cultures. Its population of over 3,100 million constitutes nearly 60 per cent of the world's total,1 and its economies are a major source of growth in the world. The economy (GDP) of South and East Asia grew at a rate of 7.0 per cent for the period 1981-1990,2 which was more than double the world average of 3.2 per cent,3 or that of the developed market economies (a category which also includes East Asian Japan), whose average growth rate was 3.0 per cent.4 The countries of East Asia particularly are tilting the world's centre of economic and industrial gravity away from the North Atlantic area.
Other parts of the region, such as South Asia, have also achieved credible industrial growth, though this is as yet less spectacular than that of some of the East Asian ones. Thus, India, although having considerable problems, grew at an annual rate exceeding 3.6 per cent from 1965 to 1990,5 and indeed for the period 1980-1990 it grew by 5.3 per cent.6 This can be compared with the growth, say, of the first industrial nation, the United Kingdom, from 2 to 3 per cent in the nineteenth century.7 And during the period 1965-1990 India's manufacturing capacity grew at 6-7 per cent a year.8
Thus, since the Second World War, the Asian region has shown remarkable growth in its industrial capacity. Many of these countries will, therefore, be key industrial players in the world economic arena. The period covered by the case-studies presented here is thus significant as a turning-point.
The role technology plays today in the development of Asian countries is dependent on many contingent factors. These include local history and social structures, traditions of technology, and local perceptions of the growth of industry in the West and the reactions that this engendered. A sketch of these contingent factors is an essential backdrop to an understanding of technology in contemporary Asia.
The per capita income of the region before the nineteenth century was not very different from that of Europe. The differences arose primarily after the Industrial Revolution. There is also some evidence that the success of the Industrial Revolution in Britain was paralleled by the partial destruction of manufacturing capacity in parts of Asia.9
The Asian region witnessed many scientific and technological developments before its encounter with the Europeans. These varied from knowledge of algebra and trigonometry in parts of South Asia to that of the compass and gunpowder in East Asia, and included many useful technological devices. In fact, the gradual development of science and technology in Europe was initially due in part to the transfer of some of these concepts and technologies to Europe and their interaction with the dynamic social, economic, and cultural forces let loose there after the Renaissance.10 Before this period, there was also much intraregional traffic of ideas and knowledge within Asia.
The region and the global historical setting
The rapid development of technology in eighteenth- and nineteenth-century Europe had a positive feedback character, one technology development feeding another, leading to a spiral of technological development and economic growth. These occurred largely in the textile industry in Britain. In the cotton industry, innovations in spinning stimulated further improvements in other parts of the closely linked chain of cotton production. As a result, new forms of mechanization gradually emerged throughout the entire chain. Ultimately, this process of innovation led to the emergence of advanced machines that made inevitable - because the new technology was clearly far superior to the existing forms of manufacture - the development of large factories using these machines. The new technology helped turn cotton into a big industry, and as such its effect was felt throughout the land. This British experience became a model and an incentive for other countries to embark on the new technological road.11
The industrial Revolution in Britain and the spurt in technology was preceded by the scientific revolution which reordered the formal perceptions of the natural world. Yet the technological spurt and the Industrial Revolution were not directly due to these new perceptions of the natural world brought about by the scientific revolution.12 In fact, many of these developments were carried out by matter-of-fact technicians rather than scientists.
In the twentieth century, particularly since the Second World War, and more spectacularly in the last 20 years, technological developments have been directly linked to scientific advances. Many technological developments today, such as those in the front-line areas of biotechnology and information technology, are directly linked to research.
The technological growth that emerged in Europe was intimately linked to its economic development. This technological and economic development and the changed economic relations it brought about spread beyond Europe. These new global relations were associated with the search for raw materials for the new industries as well as for a partial market for the new industrial products. The relationships, however, were not limited to purely economic ones. A map of the world before the period on which we concentrate in this book would show large areas under the direct or indirect tutelage of Europe or its settler bastions.
The asymmetrical relationship of political power and economic power between Europe and Asia was also reflected in knowledge, technology, and culture, although the cultural intolerance which marked the mercantile era of expansion, with its attempts at mass religious conversion, had mellowed and the transfer of ideas had changed character in the industrial era. Transfers of knowledge, including sometimes those of industrial technology, were a part of the interaction between Europe and its colonies in the period before the Second World War.
This second phase of transfer of Western ideas can be traced to a fundamental change in geopolitical relationships from the nineteenth century on, with metropolitan economic interests centred largely on investment in mines, plantations and other activities that produced raw materials for the Industrial Revolution. This re-division of labour also went in parallel with the new skills needed for activities associated with the colonial presence. These requirements were often met by two processes: the transfer of institutions modelled on those of the centre and the transfer of an educational package up to university level.13
As the industrial era progressed, there were many significant changes in technology and industry, as well as in economic and political relations, between Europe and Asia. Asia and its perceived riches were the initial raison d'être of mercantilist voyages and subsequent
European expansion dating from the sixteenth century. In contrast to the situation in the Americas, or later in the nineteenth century in Africa south of the Sahara, the Asian encounter with Europe was not one of simple and easy subjugation. The Asian region's powers of resistance were much greater than those of the other two continents.
The countries nearer Europe, such as South Asia, gradually succumbed in varying degrees to European political and economic control, partly owing to the judicious use by outside powers of internal conflicts. The further east one went, the weaker were the communication and supply lines from Europe, and the more superficial was the penetration. However, China, though not completely colonized, suffered a partial internal collapse and was subject to a set of unequal treaties, with a consequent loss of sovereignty. At the extreme end of the European supply line was Japan, one major country apart from Thailand that defied European penetration after an initial encounter. It sealed off its borders after this initial contact till late in the nineteenth century, except for a nominal window in Nagasaki open to the Dutch.
The social changes engendered by the Asian interaction with Europe gave rise to a particular dynamics in the internal economic and manufacturing structures of the various Asian countries. In the centres of penetration of European commerce, local commercial groups grew up often as allies of the foreign power, as in cities like Calcutta and Shanghai. Some of them, like the comprodores of China, engaged in trade only as intermediaries, whilst others gave rise to the beginnings of a local industrial class, as in some parts of India.
The penetration and the partial subjugation of Asia by Europe gave rise to various local social responses aimed at both political and economic independence. Often, the debates surrounding the two went hand in hand. The debates themselves were often articulated by different strata who themselves were sometimes partial products of the European encounter.14 Many of these debates began in the nineteenth century and continued in the twentieth, their effects having strong echoes in the era subsequent to the Second World War.
The Japanese response, after the initial decision to encounter the challenge from the West by adopting its technology and other characteristics, was perhaps one of the most single-minded outcomes of such a debate. Once it had been decided to open up the country after the Meiji Restoration, a policy of emulating and absorbing the technology and other socio-economic forms of the West was pursued with zeal. Japan was a uniform culture and absorption of Western influences was, therefore, relatively easy. Furthermore, it had escaped subjugation, it did not have strata that were derived from a colonial presence, and its intellectuals did not possess a "wounded psyche." All these factors allowed for a very pragmatic and rapid absorption of Western-derived technology. Although this absorption was considered to be selective, as reflected in slogans such as wakon yosai (Japanese spirit, Western civilization), the technology was in fact absorbed largely unchanged. This was achieved essentially by developing the existing social, economic, and technological structures, the earlier system in many ways blending seamlessly into the new.15 It was as though Japan, in its desire to possess particular industries, had gone shopping around the world with no psychological hang-ups and bought what it wanted.
Another country that escaped direct colonial penetration, albeit by a judicious geopolitical balancing act between various foreign powers, was Thailand. Thailand again possessed continuity of economic, technological, and cultural structure. This meant that when it decided upon industrialization, it could do so by "shopping around" for industrial development, basing its decisions on the perceptions of local social and economic structures.
Yet it is in the other countries of Asia, which were under varying degrees of political subjugation, that more "theoretical" (as opposed to pragmatic) approaches to industrialization and technology acquisition arose. In countries such as India and China, the search for industrialization went together with the search for national liberation. The discussions in these two major countries strongly influenced their neighbours.
A common thread in India and China was the example of the Soviet Union, which had apparently made a successful attempt to industrialize in the short time that had elapsed since the late 1920s, mainly as a result of its first two Five-Year Plans. Stalin's attempt at industrialization was widely admired at a time when neither the nature of that industrialization nor its human costs were yet visible.
Soviet society was also guided by a philosophy - Marxism-Leninism - which seemed to provide an explanation for the subjugation of Asian countries ("imperialism") as well as for their emancipation ("national liberation struggles"). The logic of liberation struggles in the original Marxian formulation was followed in China, whilst a home-grown emancipatory logic largely based on the teachings of Gandhi was followed in India. Each of these forms of emancipatory logic also had its explicit and implicit logic of production.
These different forms of logic were influenced by decision-making élites, existing socio-economic structures, and "the changing situation on the ground." In the case of India, a major element of the debate on relations with the West was Gandhi's rejection of urbanism and industrialism and his recommendation of a village-based economy. Yet the industrial policy that was finally adopted was that of Nehru. This was influenced strongly by the Soviet model and by Nehru's socialist orientation. The pro-industrialization policy was also helped by the many local industrialists who formed an important part of the power base of the Indian Congress Party. There was, however, a major difference from the Soviet model. Planned industrialization in India was being attempted within the framework of a market economy without a revolution, and without an omnipotent Politbureau. A further departure was that the vestiges of Gandhian policy still remained strong in manufacturing, in the protected handicrafts sector.
If the Indians veered away from the strict Soviet model, so too did the Chinese model. The Chinese, in waging a protracted guerrilla war primarily in rural areas, had to support themselves economically and so had to develop a viable production base.16 This meant the adoption of policies that could help them meet minimal manufactured goods requirements. This practical exercise in industrial production before the communist take-over in 1949 was to colour the Chinese experience, leading it away from the strict, theoretically derived model of industrialization that was arrived at in the Soviet Union after the revolution. This specifically Chinese tendency was intensified in the later years, particularly when the Soviet Union withdrew its initial support after the Sino-Soviet conflict.
If the example of the Soviet Union was a strong influence on China, communist South-East Asia, and South Asia, countries in East Asia had different geopolitical influences. The Republic of Korea, Taiwan, and Hong Kong were ranged on the opposite side of the ideological spectrum in that they were all strongly anti-communist states, both having as adversaries "parallel entities" in the form of mainland China and the Democratic People's Republic of Korea. They pictured themselves as strong ideological and economic adversaries of communism. They benefited strongly from a nurturing and aid relationship with the West, primarily the US and, to a lesser extent, Japan and the other OECD countries. Yet these economies, although governed by market principles, contained an implicit admixture of the Japanese and Soviet experiences, both of which were led by strong central government guidance. This meant that in a country like the Republic of Korea, the impact of the state was initially very strong in key industries.
If the Republic of Korea and Taiwan were the direct adversaries of their "parallel entities" in the communist bloc, several other countries in South-East Asia were drawn into a strong anti-communist stance because of internal political and geopolitical considerations. These countries included Hong Kong, Singapore, Thailand, Malaysia, and Indonesia. The economic policies followed by them included - except in the case of Hong Kong - state guidance of the economy combined with strong economic support from Western countries, primarily the US, and a distinct bias towards the private sector.
We have described the geopolitical background at the time the countries of Asia began consciously to implement policies of industrialization. It was a dynamic background, with several of the external and internal givens changing rapidly after the onset of industrialization. Some of these internal dynamics were the result of social and economic changes brought about partly by the success or failure of the initial economic and industrial policies. A significant external factor was the changing world economic and technological environment.
Post-second world war geopolitics
The structure of production and international trade at the end of the Second World War closely fitted a colonial mould. The key metropolitan countries in Europe and America were closely linked with their various subjugated lands in Asia. This meant that the bulk of the trade with these Asian countries and the West centred on the export of primary produce and the import of finished goods to Asia. Colony or near-colony was closely linked economically to the "mother" country. Little trade from other European countries penetrated the colony. This was the pattern established in countries like Korea, which was colonized by Japan, whilst in Thailand, which was less directly linked to a single European country, a greater spread of imports and exports was possible. As colonialism declined in the 1940s and 1950s, trade patterns changed.
This transformation was also helped by the intensified trade within the "mother" countries themselves, as post-Second World War rearrangements also led to a greater expansion of intra-European trade and the lowering of economic barriers. The world was in some ways becoming less parochial and forging new connections; in other ways it was becoming more parochial, with an intensification of intraregional links.
The decrease in parochialism is seen in the globalizing tendencies which have become a central feature of the modern world. Commerce, trade, ideas, and culture travel around the world much faster and in a more thoroughgoing way than before. Because of widespread travel possibilities and exploding global telecommunication links, distance becomes less and less important and the world is increasingly interlinked.17 No country in this deepening process can remain an island, and no economy a single player.
Economic, technological, or cultural autarchy is not possible in this interdependent world, as the implosion of Eastern Europe vividly demonstrates. Yet, as the world became increasingly interconnected, it became clear that all the interconnected players were not equal. A dynamic new web of economic and other relationships between Asia and the rest of the world replaced the relative rigidities of the colonial world. These relationships, although often perpetuating older unequal relationships, through their very dynamism permitted new configurations and new opportunities, encouraging the mastery of external technology, the acquisition of internal industrial capacity, and the emergence of new patterns of trade and commerce within as well as between countries.
The countries of the region responded in varying ways to the changing circumstances of the ax-colonial world. Countries such as India and China, and those influenced by their respective strategies, followed the path of import substitution and even of near-autarchy. Other countries, such as the Republic of Korea, initially followed import-substitution strategies and later became export-oriented. City-states like the ports of Hong Kong and Singapore had more open policies towards the external world, though Singapore's were more government-directed than the laissez-faire policies of Hong Kong. Other countries fell somewhere in between the openness of Hong Kong and the more inward-looking policies of India and China.
As independence receded into the past, the limits of import substitution, even for the larger autarchial-oriented countries, was increasingly felt. The subsequent process of lowering the economic and technological barriers to the outside world was also influenced by external financial and lending agencies, such as the IMF, the World Bank, and regional banks, as well as by globalizing tendencies that bound multinational companies deeply into the global economic fabric. If the earlier multinational companies that penetrated Asia in the colonial period were associated with one parent nation, the new multinationals were increasingly broad-based and dynamic. More and more, their ownership itself was traded publicly and across borders. The search for profit maximization of these large economic entities led to symbiotic relationships with smaller economic entities in Asia, relationships that covered not only trade but also technology and manufacturing capacity. Some industries from the metropolis were relocated in Asia, initially because of the rise in labour costs in the metropolitan countries.
Early commentators on this redivision of labour emphasized only the search for cheap labour, but ignored or minimized the technology transfer that this entailed. More recent studies of such economic relationships, especially in South-East Asia, have suggested that the search for profit maximization of MNCs also led to the concurrent development of technological capacities in the Asian region, including the emergence of significant R&D facilities.18 Capital, technology, and, to a lesser extent, labour had become much more mobile in the new emerging global order. In 40 years, the colonial order had been transformed into a more vital and dynamic entity.
This continuing globalization was helped not only by geopolitical considerations, such as the break-up of the colonial system, but also by key changes in technologies.
When industrialization began in the late eighteenth and early nineteenth centuries, technology associated with the steam engine was a key factor. Since then, successive technologies have transformed manufacturing and consumption, and these waves affected different countries at different times. Those countries that began to industrialize in the nineteenth century, for example, first incorporated the earliest industrial technologies and later added other generic technologies as they emerged. In this, the early latecomers to industrialization followed the historical sequence of technology development in the West, although in a telescoped form.
Those that came later still - particularly those that embarked on major industrialization after the Second World War - encountered a world of generic technology that had a greater spread than existed in the early years of industrialization. At the heart of our description of the mastery of technology in Asia in the last 40 years is the differential importance and impact of the generic technologies.
The key technologies in order of emergence are: steam; electricity; chemicals, oil-based chemicals, and synthetic materials; and, in the contemporary period, information technology and biotechnology.
One should note here that new technologies, as they develop, pass through the economy in "creative waves of destruction," in the words of Schumpeter,19 destroying the old and establishing the new. This process gives rise to a new range of products together with new technical means of manufacture. Steam was one such technology, powering the early systems of mass manufacture. Its penetration, in the form of application to products and processes, achieved a plateau in the latter half of the nineteenth century, around the time that Industrial Revolution technology was beginning to penetrate parts of Asia.
The next technology was associated with electricity.20 This gave rise to a wide range of applications, changing not only the motive power in manufacture from steam to electricity but also making a qualitative shift. Here, the motive power associated with the electric motor signalled a change in the organization of the factory, from one with a centrally placed power source based on a steam engine, with a clutter of belts to transmit the power, to a more decentralized system with several individual manufacturing operations powered by individual motors. The new electrical technology also gave birth to a variety of new products in the new forms of light, heat, and motive power. This "wave" rose rapidly in the latter half of the nineteenth century and reached a plateau in its applications in the West around the 1950s, at a time when the bulk of the Asian region was launching itself on a concerted industrial programme.
In similar fashion, the technologies associated with the internal combustion engine, oil-based chemicals, and synthetic materials emerged around the beginning of this century, and their applications then increased rapidly,21 levelling out around the 1970s, at a time when most countries in Asia were beginning a shift from import-substitution and quasi-autarchic policies to a more global orientation.
The two new technologies that are rapidly maturing at present, namely information technology and biotechnology, are expected to have a much more pervasive impact than the earlier technologies. Information technology will replace many human functions on a mental level, in the some way that the steam engine replaced human and animal motive power.22 A wide variety of hitherto human roles, from the highly skilled to the most routine, are being penetrated by the new technology. In addition, this technology is able to perform new mental functions formerly beyond the scope of humans. It will therefore penetrate not only manufacturing systems and manufactured products but other sectors of the economy as well, including many human functions in such spheres as administration, marketing, and finance. It should be noted that the number of applications of the new information technology is rising rapidly, much more rapidly than did the earlier technologies, and a levelling-off if there is to be one - is not in sight.
The other new technology, biotechnology, does not replace human skills but it gives rise to a very wide-ranging array of products as well as manufacturing processes. Its range of applications is increasing rapidly as new uses are discovered in fields from health to agriculture and manufacturing. The degree of penetration of this technology is at present unclear. Three possible trajectories for growth have been surmised by Freeman,23 but since his projection appeared in 1987 development in this field has accelerated, and it now seems that the faster and more pervasive scenario for the new technology is the more likely.
These two new technologies, which began to make an impact in the 1970s and 1980s, are arriving on the Asian scene at a time when Japan has caught up with the West in industrial terms and when several other Asian countries have passed their import-substitution phase and are beginning to open up to the outside world.
It is also important to note the interplay between the different forms of technology and the time dimension in the Asian countries. The different generic technologies that we have described have been presented to the different countries in the region at different times, at different points in the maturation of their economies, and at different periods in the global socio-economic system. In general this meant that, the later the technological arrival, the greater the spread of generic technology that one could shop for and the more telescoped the technological history that had to be acquired and mastered.
Drawing the various threads together, it is clear that the context within which the mastery of technology occurs in the Asian region in the period under review consists of several factors. These include the global geopolitical structures subsequent to the Second World War and their later rearrangement, particularly vis-à-vis relations with the West where modern technology first appeared. Many of the Asian countries emerged as political entities after momentous internal upheavals, revolutions, independence struggles, and wars; and, after they had taken their different paths towards industrialization, the global political and economic environment, as well as the nature of technology itself, continued to change. These different factors played themselves out and interacted dynamically with each other as the countries attempted technology acquisition. It is the resulting industrial directions, and their associated problems, that are charted in this research study.
The study was undertaken by several national teams in China, India, Japan, the Republic of Korea, the Philippines, and Thailand. The study covered two main aspects: first, a description of the internal dynamics of policy and socio-economic factors under which technology acquisition was carried out, and, second, illustrative case-studies of selected key industries. In the chapters to follow, different countries' broad national-level experiences in technology mastery will be discussed from the point of view of self-reliance. For reasons of space and presentation, the details of case-studies will be omitted.
The study was coordinated by Saneh Chamarik and carried out by the country teams whose names are given at the end of the book. The original research reports upon which the country chapters are based were edited by Susantha Goonatilake; the chapters were subsequently vetted for fidelity to the original by the country teams. The introduction and the final chapter were also written by Susantha Goonatilake.
1. World Population Prospects, New York: United Nations, 1990, p. 22.
2. World Economic Survey, New York: United Nations, 1990, p. 3.
3. See note 2 above, p. 1.
4. See note 2 above, p. 1.
5. Trends in Developing Economies, Washington, D.C.: World Bank, 1991, p. 275.
6. World Development Report, Washington, D.C.: World Bank, 1991, p. 206.
7. Phyllis Deane, The First Industiral Revolution, Cambridge: Cambridge University Press, 1979, p. 291.
8. See chapter I of this volume.
9. Lucille Brockway, Science and Colonial Expansion, New York: Academic Press, 1979, p. 24.
10. Donald F. Lach, Asia in the Making of Europe, vol. II, Chicago: University of Chicago Press, 1977.
11. D.S. Landes, The Unbound Prometheus, London: Cambridge University Press, 1970.
12. J.D. Bernal, Science in History, New York: Hawthorn Books Inc., 1956.
13. K.M. Panikkar, Asia and Western Dominance, London: George Allen & Unwin Ltd., 1953, p. 317; Eric Ashby, Universities British, Indian, African: A Study in the Ecology of Higher Education, London: Weidenfeld & Nicolson, 1966, pp. 63, 111; B.V. Subarayappa, A Concise History of Science in India, New Delhi: National Science Academy, 1971, p. 500.
14. See, for example, V.C. Joshi, ea., Ram Mohun Roy and the Process of Modernization in India, New Delhi: Vikas, 1975.
15. M.Y. Yoshino, Japan's Managerial System - Tradition and Innovation, Cambridge, Mass.: MIT, 1968.
16. Edgar Snow, Edgar Snow's China. A Personal Account of the Chinese Revolution, New York: Random House, 1981.
17. Joseph N. Pelton, "Global Talk and the World of Telecommuterenergetics," in Howard F. Didsbury, ea., In Communication and the Future: Prospects, Promises and Problems, Bethesda, Md.: World Future Society, 1982.
18. J. Henderson, The Globalisation of High Technology Production, London and New York: Routledge, 1989.
19. J. Schumpeter, Business Cycles, New York: McGraw Hill, 1939.
20. OECD, Biotechnology: Economic and Wider Impacts, Paris: OECD, 1989. p. 54.
21. See note 20 above.
22. OECD, New Technologies in the 1990s: A Socioeconomic Strategy, Paris: OECD, 1988.
23. See note 22 above.