The Role of Technology in Developing Economies
Technological progress has long been at the core human development, with the World Bank asserting that, "the understanding of how things are created and the communication of that knowledge are critical drivers of economic progress." Not only can the introduction of new technologies reduce the costs of production, but it can also increase the efficiency of manufacturing processes. Technological progress can create new opportunities in other sectors, expanding supply and demand in previously non-existing industries. It can also provide a means of establishing standards for quality and allow a developing country to build credibility in the global market. Perch fisheries in Uganda have relied on quality assurance systems to process their harvest in compliance with international phytosanitary standards for human consumption. Finally, it must be recognized that progress made with respect to new technologies can have far-reaching benefits. For instance, the expansion of the Internet has led to better and faster access to information, while mobile technology has promoted communication between geographically disparate individuals.
Because the infrastructure of "basic" technologies, such as a national highway or telephone system, is often missing in developing countries, technologies that the modern world considers simple can often have a significant impact in developing countries. Access to clean water, for example, is assumed in high-income countries, but remains a concern in many rural areas across the globe. As an example, there is a dearth of qualified plumbers and water sanitation technicians in Rwanda, so even simple rainwater collection techniques are difficult to institute. In addition, it is not enough for developing countries to have the knowledge about novel technologies; they must also have a clear and effective means of implementation. This typically involves regulation at the national level, so it seems likely that successful adoption of modern technologies requires some degree of investment by the government.
Case Study: Ireland
Ireland has been named Europe's Celtic Tiger (after the Four Asian Tigers) because of its rapid economic growth within the past two decades. Before Ireland's boom years, it was one of the poorest nations in Europe. However, the nation's policy of "industrialization through invitation" allowed foreign investors, especially in computer production, software, and services, to make significant contributions to the nation's economy. High-profile companies were attracted to Ireland because of its membership in the European Union, the economical wages that its labor force could provide, and the low corporate taxation rate enforced by the government. A large number of jobs were suddenly created for the Irish population, and substantial investments were made in order to modernize Irish infrastructure and cities. In less than a decade, the living standard in Ireland surpassed that of all countries in Western Europe except one. However, because overseas firms dominate many sectors of the Irish computer industry, the nation's economic success largely depended on the global demands for information technology. As a result, Ireland's economy was especially affected by the worldwide downturn beginning in 2001.