Does technological change drive inclusive industrialization? - A review of major concepts and findings

T. Gries, R. Grundmann, I. Palnau & M. Redlin


Technical change is a major driving force for economic growth and development, thus, technological change and innovations could be a powerful process that opens-up opportunities to increase social welfare and social benefits for societies. Whether in reality opportunities from the process of technical change turn into real and inclusive benefits for a society depends on a number of facts. Hence, in this contribution we focus on the question of inclusiveness for the global process of innovation and technical change. We discuss a number of questions such as: Does technical change in DCs show specific characteristics that affect different groups of labour asymmetrically? Further, for the transfer of technologies to LDCs we ask: What are the channels of technological transfer from DCs to LDCs that allow developing economies to participate in benefits of technical change? How can a transfer of technologies affect economic and social development? After identifying such elements that link technical change to the question of inclusiveness we describe the effects of technical change on inclusiveness in DCs and LDCs. We try to answer questions like: Which groups benefit more or less from gains of technical change? Were benefits inclusive for a major share of the population or could basically small groups take advantage? Which are the reasons that led to non-inclusive growth for a larger share of the population.

Key words: technological change, global technological transfer, structural transformation, development, inclusiveness

JEL Classification: F15, F16, I24, J31, O14, O15, O33