An article in the latest (last week’s) Economist talks about the importance of an existing infrastructure before new technologies are introduced. If there isn’t any solid infrastructure, then it’s almost pointless to introduce a new technology:
…as a recent report from the World Bank points out, it is the presence of a solid foundation of intermediate technology that determines whether the latest technologies become widely diffused. It is all too easy to forget that in the developed world, the 21st century’s gizmos are underpinned by infrastructure that often dates back to the 20th or even the 19th. Computers and broadband links are not much use without a reliable electrical supply, for example, and the latest medical gear is not terribly helpful in a country that lacks basic sanitation and health-care facilities. A project to provide every hospital in Ethiopia with an internet connection was abandoned a couple of years ago when it became apparent that the lack of internet access was the least of the hospitals’ worries. And despite the clever technical design of the $100 laptop, which is intended to bring computing within the reach of the world’s poorest children, sceptics wonder whether the money might be better spent on schoolrooms, teacher training and books. [link]
This is of particular interest to us, because judging by what we have been doing in class for the last couple of weeks, it seems almost heretical. Consider that we learned that the only thing that can cause long-term sustained growth is the improvements of technology and labor efficiency.
Assignment: I’ve uploaded the article to the ‘Handouts’ section to the right. Read it and think about it in the context of what we have learned from the Solow Growth Model and its implications on American and world economic growth. Once you have done so, leave a comment on this post (a few short paragraphs, no more than 50-60 words) on what your thoughts are. This will count as one assignment (a maximum of 1 point). The deadline is next Friday (2/22), 1pm.