Fong Chan Onn

Appropriate Technology: An Empirical Study of Bicycle Manufacturing in Malaysia

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INTRODUCTION

The dramatic recovery of Western Europe after the end of the Second World War brought with it the widely held notion that, in order to alleviate the problems of poverty and mass unemployment encountered in developing countries, rapid industrialization utilizing the latest technologies developed in industrialized countries should play a key role in the economic development of these nations (4) (15). However, by the dawn of the 1970s, it became apparent that this strategy was not bringing the miracles anticipated. Two decades of rapid industrial growth has Ied merely to the creation of a small, albeit prosperous, modern sector juxtaposed upon a far broader traditional sector subsisting at poverty level. The promise of massive job opportunities, as a consequence uf industrialization, never materialized. There is overwhelming evidence that this is mainly because of the fact that the technologies, which formed the basis of industrialization in developing countries, were the capital-intensive ones developed by the high-wage industrialized nations (2) (3) (18). Such technologies, after transfer to developing countries, were never able to generate the massive income generating opportunities anticipated.

In an urgent effort to try to rectify this developmental mishap, the concept of "appropriate" technology ("Appropriate" is the epithet now used most commonly, perhaps because of ist intrinsic ambiguity, in prereference to others such as "indigenous," "progressive," "labor-intensive," "self-reliant," and "intermediate.") pioneered by the ILO (5), and a number of other researchers (2) (11) (16) in the early 1970s. The main thrust of research in this direction has been the recognition that "modern" technologies transferred from the industrialized countrics may not be suitable to the receiving developing countries, not only from the viewpoint of inadequate employment generation, but also from the viewpoint of inducing misallocation of scarce resources leading oftentimes to political instability (1). Given this premise, it is then essential for developing countries to conduct extensive research - empirical or theoretical - to determine the types ot technologies most appropriate to their environment. One way of persuing such research is to examine the set of currently available technique for a perticular product (or process), and out of this evaluation identify a technique which is most appropriate with respect to an accepted set of criteria. ( The criteria adopted for this study will be specified and justified later. Actually this research approach ignores the possibility of developing new appropriate technologies. Such as possible is held by some economists which believe in "investment in knowledge" (see, for example, (6) (19). However, we believe that for stable technologies, it is possible to identify an appropriate technology by evaluating the set of currently available techniques. For the product chosen for this study, namely the bicycle, the manufacturing technology is relatively stable. Hence the methodology is justified.) In this study we perform such an investigation for bicycle manufacturing in Malaysia. Bicycle is the most common form of transport equipment in Malaysian households. It is owned by about 50 per cent of families with income below M$99 (The momentary unit used in this paper is the Malaysian dollar. As at the end of 1978, the conversion rate is US$1.00 = M$2.20.) per month and about 75 per cent of families with income between M$100 - M$299 per month (19). Hopefully, conclusions from this study would ofer policy implications for the promotion of appropriate technologies in not only this important sector, but also in the other sectors where the manufacturing techniques are similar, e.g., metal fabrication and general engineering industries.