Technical Knowledge and Managerial Capacity as Limiting Factors on Industrial Expansion in Underdeveloped Countries

The rate of economic development is dependent upon the supply of several complementary factors like the availability of natural resources, adequate supply of different categories of labour, accessibility to technological knowledge, capacity to adapt and modify known methods as well as to invent new techniques, the availability of adequate managerial capacity as well as enterprise and innovation, and the existence of a political and social environment, conducive to rapid capital formation and to the absorption of current technological changes. During the process of development, deficiencies in one or several factors might tend to slow down the tempo, and unless the limitation is overcome, the economy would tend to settle down to some stage of underdevelopment. Underdevelopment in general has been viewed as a phenomenon due to a relatively slow pace of capital accumulation compared to the requirements of a continuous increase in per capita income. Whatever the cause which brings it about, the existence of a chronic shortage of capital and other productive capacity makes it essential to devise appropriate changes in technique and organisation by which the given resources can be made to go as far as possible.