Author’s note: I did promise bit coin, but there are a few unfinished businesses in the pipeline. For the next article, we will discuss Rule 70 and how to prove it mathematically. More on that later.
I have recently written about my take on science and technology and how they help bolster sustainable development in developing nations like Cambodia. This was later modified and used in a presentation in a discussion forum. The points made are mostly basic and intuitive to accommodate a large audience of various backgrounds. There are a lot more missing, a lot more to discuss.
Image source: http://darkroom.baltimoresun.com/2013/06/gummy-guns-cozy-tanks-and-other-violent-works-of-art/cambodian-artist-chimvichet-puts-the-finishing-touches-to-a-three-ton-naga-peace-monument-sculpture-at-the-development-technology-workshop-in-phnom-penh/
In developing countries such as Cambodia, sustainable development is usually associated with the pursuit of long-term development path that considers the well-being of all stakeholders. Simply put, sustainable development is regarded as a development scheme that takes various other development dimensions besides the economic facet into account – such as education, health, gender and climate change. There is a strong evidence that this sort of inclusiveness allows a country to sustain its growth and be more resilient to external shocks (global economic events, natural disasters and the likes). However, we should keep in mind that at its core, sustainable development is also about achieving a sustained rate of economic growth, though as mentioned, this should not be the only goal. Regardless, technology and scientific knowledge play a major role in facilitating and catalysing our progress in all aspects.
Technological improvement itself ought to be broadly defined as the ability to produce more output of equal or higher quality for the same amount of input (i.e. efficiency and effectiveness of input utilization). In that sense, technological advancement is not simply the introduction of new machinery or tools, but also the innovation in the way various input-output transforming processes are arranged. For instance, better storage management and record keeping can allow farmers to cut cost and avoid waste and should also be regarded as a technological upgrade.
Assuming all else constant (while de-emphasizing political factors), below is a non-exhaustive list of how science and technology support sustainable development (in no particular order of importance):
Light and medium Industries
Cambodia still relies heavily on technological spillover from foreign sources – foreign direct investment and various development aids that involve dissemination of new knowledge. The steps that the government has taken to facilitate foreign investment flow thus far is a positive sign to ensure constant influx of new scientific knowledge and technologies. One obvious impact of technology is that it raises the physical capital quality and labour productivity. Cambodia’s comparative advantage lies in its large and relatively cheap and young labour force. With higher energy cost, smaller local markets and export routes, and lower productivity level per hour work compared to its neighboring countries and large developing economies such as China, the most attractive feature of Cambodia’s labour force is still the lower wage level. With its current formal education and vocational training quality, productivity growth at least in the short run cannot rely too much on the growth of human capital. To secure its share of the global market, it is of great significance that Cambodia raises its labour productivity through more achievable means. In the short-run, assuming unchanging education and training effectiveness, output per labour hour (productivity) can be increased with better equipped labour force, and the import of new technologies will ensure steadily rising productivity and wage level while maintaining its competitiveness on the global stage. Undoubtedly, these desirable effects remain strong in the long-run as well, though the long-term development will come with more effective labour force at all level of technology.
Not to mention, better and less costly technologies enable better work environment. In light and labour-intensive industries such as garment and construction, this implies more favorable working condition to the worker. For instance, architectural design that entails better ventilation can increase the productivity of workers through the reduction of heat stress (note that there has been research which shows a significant negative correlation between heat stress and labour productivity in Cambodia). Improved cooling system also yields positive outcome for physical capital such as machines now facing less thermal problem, which is desirable for medium-industries that are generally more capital intensive (i.e. having higher capital per labour).
New technologies and scientific understanding also allows Cambodia’s agricultural sector to be less susceptible to the changing regional climatic conditions. The adoption of better and cheaper renewable energy can provide smallholders with more reliable and affordable sources of electricity. This enables the mechanization of various agricultural activities on a larger scale. The innovation in irrigation system also makes possible more harvests per year. Furthermore, crops and livestock specially engineered to withstand harsher tropical climate conditions and diseases increase annual yield, allow more sustained income and access to larger markets (when quality constraint is lifted).
New medical technologies and discoveries – that output higher quality and more affordable medical equipment, vaccination, and medicine – provide immense benefits to the entire population. Healthier workforce is more productive, but the positive effect on future growth is not to be overlooked. Healthier household is less prone to financial instability and can accumulate more saving. The effect of new findings from medical research extends to livestock as well. The resulting lower loss and higher income further bolster the ability to accumulate capital for future investment. As we are already aware of, investment is the key to long-term sustainable growth as households increase their income earning capacity. Investment comes in many forms such as investment in business or education. Moreover, technologies that lead to the decrease in maternal and child morbidity/mortality will ensure more productive labour force in the future.
Considering the currently weak healthcare sector in Cambodia, the outflow of fund in search of a better service is not negligible, especially considering the rising middle-income households and the increase in affordability of healthcare service in neighboring countries (that also experiences technological upgrade). There is no such thing as easy and simple solutions as many people point out. Under budget constraint and the competition among many needs and wants in developing countries, there is no evident of political maneuver that can get us out immediately. We can expect improvement to be slow, given the low confidence affecting domestic demand for local healthcare. Science and technology are by far among the few solutions that surely and steadily bring forth progress.
Technology also enables better capital flow and cash flow (loanable fund, remittance, etc). No countries have been able to sustain high levels of growth without a well-developed financial system. Cambodia, in particular, sorely needs some new innovations in the micro-finance sector, for example. Better banking means higher operative and allocative efficiency (low transaction cost, more efficient allocation of loanable fund, lower risk of default, etc) as well as more borrowing available and accessible for new businesses. Technologies that allows for faster and cheaper means of storing and sharing information also eases the process of regulations in the financial market, which lowers risk management cost for the financial intermediaries like banks and non-bank financial institutions (insurance companies, for instance). Furthermore, smooth financial circulation – and its attendant lower cost of transaction and wider reach to remote areas – helps facilitate and lower the cost of doing business. The greater the improvement, the greater the financial mobility, the faster and larger economic expansion in the short-run which then improves economic capacity in the long-run.
Communication and dissemination of knowledge/information
The constantly upgraded communication technologies make it possible to disseminate knowledge and information to all levels of society. This is a positive feedback loop that further speeds up the utilization of new technologies in other fields such as education (discussed right below).
The improvement in health and agriculture helps raise income for rural households. This reduces the need for child labour and enables families to send their children to school. Innovations in financial sector by, for instance, making available student loans mean higher educational attainment for an average Cambodian, thus narrowing inequality gap. Better communication technologies make it easier and less costly to ensure availability and access to high quality educational materials. More effective methods of delivery through the employment of more capable teachers/trainers, greater quality equipment and more favorable learning environment will help boost the quality of education in Cambodia at all stages from primary to tertiary education. This in turn feeds more effective labour force back into the system, allowing long-run upgrade in capital productivity (simply put, an educated person can make better use of computer and machine in general).
New information technologies mean that various activities concerning data keeping and information processing can be automated. Lesser dependence on face-to-face interaction in many private and public services potentially leads to lower level of corruption in the society without the need for costly legal and regulatory enforcement.
New scientific findings on the frontier of environmental science and other related field like economics and energy promote environmental conservation through several channels. First, the knowledge gained from education allows for better-informed and more environmental conscious citizens. Second, new discoveries and inventions in energy sector, for example, continue to reduce society’s dependence on old energy sources that are detrimental to the environment by making the alternatives more attractive through ease of installment and usage as well as increase in affordability, durability and quality. Third, it improves the capacity of a nation to reduce pollutions by providing more convenient and lower cost means of coping with environmental challenges (for instance, new waste-management methods for urban area). Fourth, innovation in seemingly unrelated areas such as architecture and engineering can change society’s preference in terms of building materials and interior decorations. By lowering the cost and enhancing aesthetics of alternatives to traditional materials like wood in construction and design, this provides businesses and consumers the incentive to switch to more environmental friendly construction materials and furniture for interior decoration. Such movement is favorable to the environment through the change in attitude of sellers and buyers in the market (especially, as age groups responsible for large consumption on durable goods move to new generations with different taste/preference).
Women arguably possess less physical strength than men on average, thus giving men the edge in many labour intensive activities and consequently more control on family finance (yes, this is the average statistics. The not-so-average men (on the tail of the distribution) can of course be physically weaker). This tends to result in the imbalance of power within the society and household alike.
However, when it comes to white-collar work and various capital-intensive activities that require intellectual prowess, women and men are equally capable (again, on average). Technologies that promote education and make possible these activities will increase income earning capability for women; hence, play an important role in promoting their independence and decision-making power within their family, community, and society at large.
More educated and productive workforce, higher quality soft and physical infrastructure, well-functioning financial system, availability of high quality physical capital stock and more human-friendly environment, all these are conducive to long-term sustainable development and growth. Note that these impacts are not isolated as some work together with synergy. For instance, promotion of family well-being through higher income and better health are conducive to higher level of educational attainment as parents can now afford (in both time and money) to spend their children to school and leaving them in school for longer period. All the factors mention raise the nation’s ability to make transition to become a more capital-intensive and knowledge-based economy, a more sustainable form of economic structure.
On a more controversial discussion that you might be itching for…
Should we not care about politics? The bottom-line is it is not clear whether political changes can lead to greater well-being for the mass or the other way around (i.e. perhaps it is the dynamics of the changing economy and society that leads to better politics). Talking from an objective viewpoint, there has not been conclusive evidence that changing the locomotive will change the track or brings you to the final destination faster. In research study, we have something called “external validity“. The question is “will findings for one nation at a particular time frame be valid for another nation in a different time frame?“. Will we see the same positive impact of political changes made in the early 20th century in many of the western nations on the south-eastern nations like Cambodia in the 21st century? There is no evidence, no straightforward answer to date. Without proper evidence, you can safely say that the rest is purely based on opinion and personal ideal (which brings no fruition to the discussion table). Plus, given that Cambodia is heavily reliant on influx of foreign capital, any sign of severe changes that shake the floor of stability will undoubtedly cause capital flight/retreat (as foreign investors withdraw their direct and portfolio investment from the country). Yet, there is no well-informed and rigorous study on the history that led to stability, a crucial component for market-based growth, in the first place. All we know with certainty is that stability is the primary source of sustained and rapid economic progress. Yes, there are economic sanctions imposed when the state’s direction is not aligned with western ideology, and the geopolitical dynamics create an imbalance of foreign power within the domestic economy. This is an undeniable issue. But, I am in no position to impose my ideal on the readers here. All I can do is present some known facts for you. The rest is up to your discretion. At the moment, we should do what we can and technological improvement is one sure way that can definitely propel the economic and social well-being onward.