Development 2.0

Measurements of Development HDI Life Expectancy Literacy Education Standard of living Employment Income Technology Raw Materials Gender Empowerment Economic Indicators – GNP – GDP

Development Theories World Systems Theory – Core and Periphery Growth Models Rostow’s –principles of capitalism, investment, saving Nolan’s – integration of technology

The Core-Periphery Model Core-Developed Regions which use the resources of the periphery to continue their success. – i.e India, China, and Brazil’s equal global resource contribution to that of the Western world as well as Japan and Australia,

Periphery- Developing Regions – The lack of investment by developed countries keeps these countries in poverty – Developed countries also own their natural resources limiting these developing countries opportunity to create independent wealth

Semi-periphery Four Asian Tigers – As discussed in Industry South Korea Taiwan Singapore Hong Kong

Urban Areas Urban areas also serve as world “core cities” – New York – London – Tokyo Semi-periphery cities include: Chicago, Paris, and Shanghai

Core-Periphery Industrial Core Upward Transition Downward Transition Resource Frontier

Industrial Core Where the majority of industry takes place Large urban areas close to markets Northeast US

Upward Transition Areas that are gaining jobs by attracting industry Tax breaks Attractive services: schools, parks, major league sports, etc. Examples: – Southern US both West and East Atlanta, Phoenix, Houston, San Diego

Downward Transition Companies are leaving High rates of unemployment Great Plains Areas with net-out migration

Resource Frontier Resources supplied to the industrial core Transportation is the key factor – Trains and Pipelines Alaska

Rostow’s Models of Development Also known as the “Take off Model” – 1. Traditional society – 2. Preconditions for takeoff – 3. Take off stage – 4. The drive to maturity – 5. The age of mass consumption

1. Traditional Society Primary sector of the economy Subsistence farming Mass production is not yet developed

2. Transitional Phase Transportation and infrastructure improves Shift from primary to secondary sectors Entrepreneurship Expendable income rises

3. Take off stage Expansion of manufacturing sector Farmers sell more Food becomes less subsistence and more commercial Growth around urban centers However industrial growth is limited to a few sectors

4. Drive to maturity Technology seeps into other industries All areas of manufacturing are employing technology

5. Age of Mass Consumption Highly skilled professionals Productivity, earnings and savings are at an all time high Society has shifted from secondary sector to tertiary economy Manufacturing has shifted from traditional sectors to consumer goods

Critiques and Criticism Based on assumption that consumers save and invest. People use wealth to improve economic status Industry uses investment to grow and investment is returned Critics say the developing world has inequitable resource distribution that would, using this model, make it impossible to grow.

Nolan’s Stages of Growth Model Describes individual companies adaptation of technology to be competitive in the economy Six Stages – Initiation – Contagion – Control – Integration – Data administration – Maturity

Initiation Stage Technology is used sparingly Mostly for data entry (think first computer)

Contagion Stage The spread of technology More and more uses However not for personal home use

Control Stage Mass roll out but users are not comfortable with technology Difficult to use but high yield productivity on the horizon

Integration Stage Users have become comfortable with technological integration Increases productivity

Data Administration Stage Collection and storage of data Less work done by computer but rather is used to store original and inventive products by employees

Maturity Stage New uses for technology Use it as a tool to advance beyond those of their competitors

Nolan: Summary Individual companies rather than countries as a whole However, companies are at the forefront of economic development

Theories and Development Economic growth leads to development Industrial growth leads to development Trade growth leads to development