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South–South Trade in Capital Goods – The Market-Driven Diffusion of Appropriate Technology

  • Rebecca Hanlin
  • Raphael Kaplinsky
Original Article

Abstract

This article introduces a Special Section addressing technology diffusion as a result of south–south trade in capital goods; taking forward, and updating, arguments from the appropriate technology literature in the 1970s and 1980s. We review capital goods utilised in three sectors of considerable development significance in low- and middle-income economies (agricultural mechanisation in Tanzania, furniture in Kenya and apparel in Uganda). In each sector, southern-origin equipment is distinctive by comparison with northern-origin capital goods. At observed capacity utilisation rates, southern-origin capital goods are economically efficient, accessible and profitable to users, and demonstrably appropriate to operating conditions in these three economies. As a consequence, not only are Chinese-origin capital goods diffusing rapidly in these three economies, but so too are they diffusing in other developing economies. Chinese-origin capital goods now account for almost one-third of all capital goods imports in Africa, Latin America and South-East Asia, and Indian equipment is also widely utilised in many low- and middle-income economies. This suggests a wider significance of our findings and calls for policymakers to harness the opportunities provided by market-driven south–south trade in capital goods.

Keywords

inclusive development induced innovation appropriate technology south–south trade capital goods 

Abstract

Cet article introduit une section speciale considérant la diffusion des technologies comme étant un résultat du commerce Sud-Sud dans les biens d’équipement ; en prenant en considération des arguments du mouvement des technologies appropriées dans les années 70 et 80 et en les mettant à jour. Nous analysons les biens d’équipement utilisés dans plusieurs secteurs de l’importance considérable du développement dans les pays à faibles revenus et à revenus intermédiaires. La spécificité relative des biens d’équipement originaires du Sud comparé à ceux originaires du Nord est analysée dans trois économies de l’Afrique de l’Est. Nous montrons que les biens d’équipement originaires du Sud sont économiquement efficaces et qu’ils peuvent être vus comme appropriés gràce à leur adaptation avec les dotations factorielles et des considérations plus générales dans ces économies importées. Les biens d’équipement originaires de Chine justifient désormais presque un tiers de tous les biens d’équipement importés en Afrique, Amérique Latine et Asie du Sud-Est et le matériel indien est également largement utilisé dans beaucoup de pays à faibles revenus et à revenus intermédiaires. Ces appels des politiques afin d’exploiter les opportunités offertes par un marché a conduit à un commerce Sud-Sud en biens d’équipements.

Notes

Acknowledgements

The authors are grateful for the helpful comments provided by two anonymous referees.

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Copyright information

© European Association of Development Research and Training Institutes 2016

Authors and Affiliations

  1. 1.African Centre for Technology StudiesNairobiKenya
  2. 2.Open UniversityMilton KeynesUK
  3. 3.University of SussexBrightonUK

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