Technological Retrogression

The aim of this book is to broaden our understanding of technological change by adopting the concept of technological retrogression. With reference to concrete cases of technological retrogression a new conceptual framework is developed. Extensive fieldwork in Sri Lanka and Malaysia forms the empirical fundament. A new method of reconstructing technological change is furthermore developed. The book contains a detailed account of the work history method, which is designed to capture changes over time where there are no statistical data available. The book contains a thorough examination of central theories of socio-economic transitions in developing countries, searching for an explanation of instances where modernization reverses. 

The exposition aims at contrasting retrogressive economic dynamics of technological change to progressive dynamics as developed by Schumpeter. At one extreme in the dimension of technological change, capital-strong production units innovate their way out of the recession through technological progress, adopting more advanced production equipment that improves productivity. Following Schumpeterian progressive dynamics, virtuous spirals of growth result. At the other end we find the producers that resort to technological retrogression, which secures survival, but which result in low labour productivity, diminishing the possibility of capital accumulation and thus modernization that could form an escape from poverty. Vicious spirals of decline result, which is the book’s main object of analysis. The theory is, thus, a contribution to understanding the anatomy of recessions.

The contention is, thus, that a choice of technology of production may lead to reduced productivity and economic decline. The concept of technological change should, therefore, not be equated solely with productivity improvements and economic development. Producers who experience technological retrogression may find themselves in the paradoxical situation of earning more by producing less, a paradox which is addressed in this book. Furthermore, where technological retrogression involves a return to organization of production of the past, this may affect the political leverage of labour, curbing social progress. Reversal of modernization, technological and organizational, is linked closely to marginalization of producers and increased social inequality. Lock-in of producers, both technologically and geographically, into activities characterised by diminishing returns, is considered a major precondition of technological retrogression. Therefore, the phenomenon is thought most likely to occur during periods of economic decline, recessions or during prolonged crises.