TECHNOLOGY AND ECONOMIC DEVELOPMENT IN NIGERIA: CHALLENGES AND PROSPECTS

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TECHNOLOGY AND ECONOMIC DEVELOPMENT IN NIGERIA: CHALLENGES AND PROSPECTS

ABSTRACT

This research was carried out to compare the concepts of technology and economic development in order to establish the importance of the former in boosting national economic development. The study was geared at determining 4 distinct objectives. These were to compare the concepts of technology and economic development. Thereafter, Nigeria’s performance in advancing technology was compared with selected countries. Some factors that hinder technological development in Nigeria were also examined. Finally, strategies were proffered on the means of improving technological development in Nigeria as a prerequisite for enhancing her economic development. Indeed, Nigeria has faced challenges in addressing critical issues required to make life better for the nation through technology development. Accordingly, this research proposed some strategies that could assist the government in addressing these challenges.

The descriptive research method was used for the study. The research revealed that technology and economic development are interconnected concepts with similar objectives geared towards improving the lot of society. It was further discovered that Nigeria’s technology base has not yet been able to provide sustained economic development for the nation. Furthermore, it revealed that technological advancement factors are not being adequately addressed as key enablers of economic development. In comparison with selected countries, it was discovered that Nigeria has inadequacies in its technological development efforts. These were discovered in areas of technology transfer agreements, R&D funding, technical education, corruption and other economic development factors. However, these shortcomings could be remedied in order to make technology a tool in enhancing the nation’s economic development.

3. To reverse the poor state of Nigeria’s technology-base, improved funding for R&D and technical education was considered expedient. In addition, the FG government was implored to encourage the private sector to be more committed to R&D efforts, set up bottom-up community development programmes to mitigate poverty at the grassroots and complete the construction of the ASCL.These strategies if employed would result in achieving sustained economic development for the nation.

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND

The world’s economies have over the last few decades, undergone dramatic transformation as nations strive for economies driven by technology (Nelson, 2005:7). To compete favourably in the global arena, a nation must have an economy composed of firms that constantly innovate and maximise the use of technology (Nelson, 2005:9). The importance of technology is evident in the way it bridges the gap between countries and citizens through televisions, satellites, cellular phones and commercial products. Technology-based economic development has therefore, become the means through which a nation’s economic base can thrive.

Technology represents a positive force that enhances human capabilities and expands resources. In his 1987 treatise on the Concept of Technology, Milton Lower contrasts the conventional view of technology as “gadgetry” or “individual creativity” (Milton, 2005:15). Rather, he describes technology as an “intangible asset” belonging to the community which serves as a basis for cumulative economic change (Milton, 2005:15). In this context, technology can be seen as not just the latest in high-tech weapons but the generalised knowledge of a people about how the world operates. This leads not only to inventions by a few, but appropriate implementations of new ways of developing things in tools and processes by many for economic development.

State support for technological advances in the industrialised nations is evident in their drive to remain significant in the international system. Through technology, nations such as the United States of America (USA) and Britain create wealth, improve their defence systems, provide better health care and enhance the standard of living of their citizens (Soderbaum, 2000:15). Clearly, the level of advances in technology suggests that states lagging behind in technology-based knowledge are more likely to be marginalised.

Despite advances in technology and the continuing impact on world civilisation, most developing countries have made little effort locally to transform their societies technologically (Soderbaum, 2000:17). As a result, they continue to suffer from political and economic underdevelopment. Accordingly, the economies of most developing states are characterised by remote health facilities, high rates of unemployment, low educational standards and poor standards of living. However, while this may be true, some developing states such as Singapore, South Korea, Taiwan and South Africa amongst others have made remarkable technological advances (Soderbaum, 2000:20). Through the implementation of appropriate institutional frameworks, these developing countries have designed policies for developing indigenous technology. This accounts for one of the major reasons why China recently emerged as the world’s second largest economy after the USA (Akinlo, 2007:24).

In Nigeria, the absence of appropriate institutionalised frameworks continues to retard the nation’s technological advancement (Dike, 2005:12). This has greatly undermined her economic development especially in relation to other developing economies. The concept of technological development in Nigeria evolved through the years after her independence in 1960. During this time, British firms dominated production and distribution organisation in Nigeria (Dike, 2005:12). The focus of the Federal Government (FG) then, was to gradually reduce the nation’s dependence on Britain. To this end, existing companies were encouraged to improve their technological development, while efforts were directed at technology transfer from Britain and other developed nations. Thus, between 1960 and 1981, Nigeria witnessed massive importation of capital goods and establishment of very crucial industries such as the Defence Industries Corporation of Nigeria, Ajaokuta steel industry and Nigerian Machine Tools Company amongst others (Dike, 2005:14). However, most of these industries have not been able to adequately advance the nation’s technological development.

Since the 1980s, Nigeria’s technological drive has continued to dwindle. The emergence of crude oil as a major export earner has further relegated the desire to encourage or develop the nation technologically (Dike, 2005:16). This is because various governments feel that national needs could always be met through earnings from crude oil sales without necessarily advancing Nigeria’s technological base. Accordingly, prior investment in infrastructural development and industrial manufacturing sectors has continued to collapse. Thus, Nigeria’s near complete dependence on imports results in currency devaluations, deteriorating services, high inflation, massive unemployment and very poor standards of living (Dauda, 2003:84). Furthermore, the failure of the FG to put in place appropriate policies that would encourage technological advancement results in the brain drain of some of the nation’s best intellectuals. Most of these intellectuals are now significant contributors of to the technological development of the counties where they reside. This clearly suggests that despite the initial appreciable technological inflow into the country, Nigeria has failed to adequately develop her technological base.

The World Bank as at October 2010 placed Nigeria’s Gross Domestic Product (GDP) at $ 206,604 United States (US) Dollars (Dauda, 2003:18). The United Nations Development Programme (UNDP) also ranked Nigeria as one hundred and forty second out of 169 least economically prosperous countries of the world for the same period (US World Development Report, September 2010). Furthermore, the Human Development Index (HDI) report for 2010 ranked Nigeria one hundred and fifty eighth in the world and twenty-fifth in Africa behind countries like South Africa, Morocco, Ghana and Cameroun amongst others (Human Development Report, 2010:213). These statistics imply that the nation has not fared too well in her economic development as required to adequately improve the livelihood of the populace.

The FG’s vision to make Nigeria one of the world’s top 20 economies in the year 2020 is a step in the right direction. It represents the thrust that the government intends to inject to drive technological development in all ramifications. However, this dream needs to be supported by realistic policies that would enable sustainable economic growth and development. In this regard, there is the need to rapidly advance Nigeria’s current technological status. This is a precursor for the achievement of any meaningful economic development.

1.2 STATEMENT OF THE PROBLEM

Conceptual issues surrounding technology in less developed countries like Nigeria most often reflect murkiness in the economic development of such nations. Nigeria is a nation blessed with enormous human and material resources and currently has the world’s eighth largest reserves of crude oil and natural gas (US Energy Information Administration, 2010:3). In the third quarter of 2010, the USA report on petroleum export placed Nigeria’s earnings at $48 billion US Dollars (US Report on World Petroleum Export, 2010:12). Despite these huge earnings, Nigeria is still ranked as one of the least developed economies in the world. The reason for this is largely attributed to the nation’s failure to develop a sustainable technological base which accounts for her continuous reliance on the importation of capital and industrial products.

In Nigeria, the tendency to think of technology in terms of finished products continues to negate efforts at sustainable development required for appreciable economic development. Accordingly, establishment of the relationship between technology and economic development is needed to reverse this misconception. Furthermore, government policies must create the enabling environment required for technology to develop. To act otherwise would amount to further undermining the nation’s chances of enhancing her economic development.

1.3 RESEARCH QUESTIONS

This study seeks to proffer answers to the following questions:

(1) What is the relationship between technology and economic development?

(2) How has Nigeria fared in developing her economy through technology when compared to some developing nations?

(3) What are the factors that hinder technological development in Nigeria?

(4) What are the strategies and policies that can assist in achieving technological development in order to improve economic development in Nigeria?

1.4 OBJECTIVES OF THE STUDY

The objectives of the study are:

(1) To establish the relationship between technology and economic development.

(2) To find out how Nigeria has fared in developing her economy through technology compared to some developing countries.

(3) To examine the factors that hinder technological development in Nigeria.

(4) To proffer strategies and policies for improving technological development as a prerequisite for enhancing Nigeria’s economic development.

1.5 RESEARCH HYPOTHESIS

This work is guided by the following hypothesis:

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(1) Technology and economic development are mutually reinforcing.

(2) Nigeria has not fared very well in developing her economy through technological development.

(3) The level of technological advancement in Nigeria varies significantly with factors such as poor technical education, inadequate funding for R&D, preference for imported goods and high prevalence of corruption.

1.6 SIGNIFICANCE OF THE STUDY

This study is significant in the sense that it would contribute in encouraging technological development in Nigeria. Additionally, its findings would assist governmental agencies to appreciate the import of technological development as a veritable tool for enhancing Nigeria’s economic development.

It is hoped that this study would add to existing literature and body of knowledge on the interrelationship between technology and economic development. Furthermore, this research work is expected to arouse additional research work on these concepts.

1.7 SCOPE OF THE STUDY

The concept of technology as well as its impact on the economic development of nation-states has evolved since the industrial age. However its relevance became significant in Nigeria after her independence from Britain in 1960. Since then, several policies regarding technological advancement in the country have been promulgated in a bid to make the nation technologically self-reliant. However, since the return of Nigeria to civil rule in 1999, the drive has become more significant as the FG now aspires to make the country one of the most developed economies in the world.

In the course of this study, only relevant literature from 2000-2010 would be referred to. Though other literatures could address the issue of technological development, it is believed that such would be out of context with the approach adopted by Nigeria since the period of stable governance in the country.

1.8 LIMITATIONS

This research work was impaired by the use of only secondary data to analyse the measure of technology and economic development from other developing countries and Nigeria. Although, the data used were from reputable international bodies, the authenticity of their findings may not be faultless. Nevertheless, these did not affect the quality of research carried out and the outcomes of the findings as numerous literature were used to validate the data used.

1.9 METHODOLOGY

The research method used in this study is the descriptive research approach. To achieve this thesis, the research design applied was the correlational study. It is a study which involves measuring 2 variables and determining the degree of relationship between them. These are technology which is the independent variable and economic development which is the dependent variable.

Sprinthall et al in Olayiwola describes correlational study as a statement about the relationship between 2 variables. It tells the extent to which the variables occur together. Thus, this study observed and evaluated the concept of economic development to establish the effects technology has on it.

THEORETICAL FRAMEWORK

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The theoretical underpinning of this study is the institutional theory of economic development. The institutionalism of Clarence Ayres and John Kenneth Galbraith pioneered the idea that economic development is more than economic growth. Economic development occurs when there is a broadly based increase in the standard of living or quality of life. While many aspects of the institutionalist view have permeated neoclassical thinking about development (Turdoff, 2002:16) this differentiation between growth and development has not, but it has been accepted by many ecological economists (Daly, 2009:21).

In addition to being broad-based and contributing to a better quality of life, ecological economists argue that true economic development needs to be sustainable over time. Their most important contributions have been to recognize first, that there are life-giving, non-renewable resources for which there are no substitutes, and second, that population growth combined with a rising standard of living will create waste, which may exceed the capacity of the biosphere. Thus, it is believed these insights along with the important contributions of institutionalism can help develop a richer and more pluralistic approach to economic development.

Beginning with Thorstein Veblen, institutional economists in the United States have disagreed with the classical and neoclassical focus on accumulation of capital as the driving force behind economic growth and development. Institutionalists identify technology and its relationship to cultural habits and institutions as the key to growth (Veblen, 2004:12). Development is more than growth. It describes an ongoing (evolutionary) process that will continue to raise standards of living for a broad spectrum of the population over time. Development is related to the new “states of mind” that come with changing knowledge and its implementation through technology.

In institutionalism, technology represents positive forces enhancing human capabilities and expanding resources. This describes the broadly accepted knowledge within a culture that Veblen terms an “intangible asset” belonging to the community and which serves as the basis for cumulative economic change. Veblen’s “instinct of workmanship” is the basis for curiosity and trial and error experimentation. It leads to innovation and the implementation of new ways of doing things in tools and processes (Ayres, 2003:18).

While neoclassical economics treats technology as exogenous, institutionalism sees technology (knowledge) as not only the creator of physical capital but a determinant of what is a resource (DeGregor, 2001:17). For example, until humans have sufficient knowledge they cannot see coal or oil as a resource for heat. Similarly, knowledge and its widespread acceptance can be the basis for using resources much more efficiently and finding ways to recycle waste rather than use and deplete resources.

Every society needs certain level of institutions to support an economy and its development, but institutionalists are inclined to view them with skepticism. Institutions are often a negative force preventing adaptation to new ways of doing things. “Institutions” refers to Veblen’s habits of thought as well as to the organizations and structures that many today are calling social capital. Religious beliefs, the materialistic view that “more is better,” competitiveness or cooperation are also institutions. Throughout history new technologies and modes of thought have flowed to societies where institutions were flexible, sometimes because they were weak and undeveloped (Ayres, 2003:24). In addition to retarding innovation institutions can also skew the distribution of economic rewards toward a powerful group, repress scientific inquiry or emphasize materialism as the source of happiness.

We can see the negative force of institutions on sustainable development in the following 3 examples. While the use of technology is often referred to as a market decision, DeGregori (2001:24) points out that “market decisions operate in a context of past and present public and private decisions.” This may create a “need” for ever increasing amounts of energy. Rapidly rising per capita consumption long after basic needs have been met strains the capacity of the environment to absorb the waste generated as well as the resource inputs needed. Veblen (2001:22), Galbraith (2003:14) and other institutionalists see conspicuous consumption as a habit of thought, fostered by a society with a demand for status markers. Geographic and economic mobility leave a vacuum about how to define who has what status relative to others that conspicuous consumption can fill. In addition, both Veblen (2001:16) and Galbraith (2003:23) observed that the organization of modern industrial economy around a powerful corporate structure twists the definition of “needs” into what will help corporations grow and profit.

An important aspect of institutionalism is its emphasis on the central role of people. They are not only the source of knowledge and technology but also the creators of the institutions that facilitate or limit applications of technology for economic development. There is also constant feedback and interaction between institutions and technology in any society, which leads to a process of accumulative knowledge and habits around how to use resources. What we have is a dynamic evolutionary system that recognizes the power of technology in creating change. However, we also need to be aware of its limitations.

Nelson (2005:25) describe institutions that protect obsolete technologies (for example, replacing fossil fuels with renewable resources like wind) and keep technology on a linear path. Because of inherent uncertainty in the future, once a particular pattern or technology works individuals and institutions are reluctant to change. This can lead to problems like path dependencies and locked-in uses of dominant technology. Thus, new technologies that can lead to a more sustainable world might be locked out of the system.

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