Globalisation, Technology, and Asian Economic Growth

Although globalisation is by no means a recent phenomenon,1its new wave has raised a number of questions-both about its supposedbenefits and its alleged adverse consequences. Rather than exploring thewider ramifications of globalisation, this paper will confine itspurview to the question of technology development and dissemination inthe context of globalisation as it has affected the development of Asianeconomies in the last few decades. In particular, the paper will focuson the somewhat dazzling performance of the East Asian economies in thelast three decades and their equally sharp and unforeseen downturn inthe past two years, which has raised serious doubts first• about thereplicability and later about the robustness of the East Asiandevelopment experience. Although the palpable cause of the current EastAsian crisis has generally been situated in the increasing complexityand fragility of the global financial system, many prescientinternational economists had attributed it to the weakness of thetechnological underpinnings of East Asian growth [Krugman (1994)]. TheEast Asian crisis has also raised a lively controversy concerning theimpact and desirability of selective micro-economic interventions bynational governments, which have often been oversimplified under therubric of 'crony capitalism'. While the debate on which causescontributed most to the sudden down-turn in the growth of the East Asianeconomies remains inconclusive, there seems considerable validity in theconjecture that their future growth prospects will depend on theirability not only to master current technologies, but also tosignificantly further their technological prowess through R and D andscientific achievement. Although the infmediate trigger of the presentcrisis in East Asia may have been the turmoil in their financialmarkets, the underlying problems in the real economy, which have so farreceived insufficient attention, stem largely from their incommensuratetechnological development.