Opinion Sur
In May’s issue we highlighted the importance of aiming to productive investment specially emphasizing on transformational productive investment. In these lines it will be pointed out how critical it is to simultaneously promote investment on state-of-the-art technology and in technology people can reach; otherwise there could be serious unwanted side effects. Investing on technology and innovation is a strategic dimension for our countries to be able to adapt to circumstances of the XXI century without being left behind in their development. This includes the entire range of modern communication technology, internet apps, healthcare activities, new agricultural, industrial and services techniques, the generation and distribution of unconventional energy, minimalistic productive designs to save materials, the promotion of recyclable production, exercising sustainable mining, environmental care and regeneration, among many others. These new technologies benefit the country as they promote added value products, generate decent and well-paid labor, boost national scientific and technological development, improve terms of trade through fair exports prices and reduce imports of higher unit value as well as payments of royalties and dividends.
Like every initiative, this highly recommendable policy of investing on technology and innovation could have unwanted side effects if these are not anticipated nor the necessary measures to avoid them are adopted. Which could those unwanted side effects be? For the purposes of this article we will mention only two of the several ones that could be identified: (i) the risk of fragmenting even more our societies into modern sectors and sectors that are left behind deepening social inequality, and (ii) the risk of increasing inequality in terms of opportunities at a territorial level within our countries.
This means, on one hand (certainly without intending to do so), that entire communities whose knowledge, contacts and abilities are not enhanced could be left even further behind, which limits their productive capacity. At the same time, if actions are not taken to regionally decentralize opportunities and investments on technology and innovation, what most likely would happen would be that the competitive advantages of regions favored by activities, information and applied knowledge’s concentration would remained unchanged.
This way and reaffirming the strategic importance of not giving up technological progress and innovation, it becomes critical to simultaneously promote the use of technology people can reach; complementing and not antagonizing technology-intensive sectors, it will enable a sustainable development of the entire society with the economic pillar of an inclusive organic growth that does not leave anyone behind.
A socially and territorially balanced development (that favors vast social and territorial majorities) is possible and does not affect at all the aim of adding value to national production. What generally occurs is that such harmonization of economic, social and territorial objectives does not usually happen spontaneously (it would be more than welcome if it did) but instead it requires public policies and specific actions. These interventions must not restrict conditions for cutting edge sectors but choose a positive approach instead, transforming the difficult circumstances in which less favored sectors and regions operate. Certainly what matters is figuring out how to do so and that is the focus of the following lines.
From distributive struggle to transformational policies
In a context of sustainable development, where will the necessary financial resources and the management energy to ensure a balanced organic growth come from? In almost every country there are powerful concentrated sectors that accumulate wealth at very high rates based on the market control they have. This power that spreads over certain sectors of the political system, the media and the judiciary, allows them to ensure the reproduction of their privileged position. In those circumstances where privilege is entrenched and becomes apparently unassilable, the dispute over financial and manageurial resources no longer takes place between privilege and the majorities but it is transfered onto the rest of the social actors. This generates tensions and divisions among medium and low-income sectors that cause the Balkanization of the transformational potential nesting in those sectors. Main inequalities are perpetuated over time, with better or worst phases but always without affecting the unbridled contemporary wealth and income concentration process.
This is why in order to transform the concentrative dinamic by removing factors that enable it, it is essential to align the interests of medium and low-income sectors. In that context, an action of the utmost importance is clarifying which are, in fact, our real interests. It so happens that we are immerse in situations swammed in mediatic and ideologic operations of very different extractions that seek to make us defend interests that are not in our favor; interests that are always camouflaged because they are indefendible in plain sight.
A better understanding of what is going on is a necessary, though not sufficient condition to help generate new correlations of forces, social movements and political parties that are less vociferous and more effective. With that social and political support it is possible to step away from the distributive struggle between majoritiarian sectors and advance towards new public policies of transformational nature. There are now several Southern hemisphere countries that have embarked on that course acting to add greater progressivity to the tax system as to make high incomes contribute much more than the rest of society, deploying a firm action against tax evasion and elusion which deepens inequality and drains immense resouces which could otherwise be invested in development, adjusting the composition of public expenditure as to favor sectors that have been left behind and those that are considered to be strategic.
Modern tecnology for people-based sectors
To abate inequalities, the redistributive action through the tax system and public expenditure is of critical importance. However, in addition, it is necessary to complement that macroeconomic action by working with low and medium income sectors so that they can generate by themselves -and retain- much more value than they do today. It is important for the State to redistribute incomes but also to back people-based sectors so they can get higher incomes through their own productive mobilization. A productive mobilization that needs to be efficient and sustainable instead of what usually happens which is the integration of people-based sectors into less promising value chains and, within them, in the most informal and residual fractions.
The challenge is to drastically change that perspective. Instead of orienting people-based sectors towards activities that are practically of subsistence, we need to facilitate the emergence of very different types of ventures: ventures established in promising sectors, integrated in segments of the value chains that will ensure fair prices and an acceptable capitalization rate. We are refering to well-structured and well-managed ventures, with shared ownership and equitable revenue distribution.
To achieve this there exist appropriate knowledge, resources, organizational modalities, only that they are not usually available to people-based sectors. Therefore there is the need to count, as is already the case in several countries, with a comprehensive support system to accompany the process of gestation, development and consolidation of ventures that we can generically denominate inclusive. A system that will combine the actions of several promoters of inclusive ventures with the intervention of developers that specialize in those ventures and financial mechanisms that will finance investment (trust funds dedicated to the sector) as well as working capital (credit entities with the capacity to handle loans for small companies). A brief description of basic outlines of this kind of support system can be found in [http://opinionsur.org.ar/Insecurity-proposal-to-remove?var_recherche=types%20of%20violence->http://opinionsur.org.ar/Insecurity-proposal-to-remove?var_recherche=types%20of%20violence ]
This type of modern technologies is needed by people-based sectors to emerge from the unfavorable circumstances they are currently immersed in: they include but are not fully comprehended by productive technology. It is also important to know how to place inclusive ventures inside promising sectors, appropriately integrate already existing value chains, become familiarized with good options to structure such ventures choosing those modalities that better adjust to each specific case, select appropriate strategic partners, adopt effective technologies in terms of management, access to information and markets they want to operate in, support and counseling that will empower and not subordinate, knowledge that will allow to identify and relate with potential investors, as well as ways to operate with financial entities and regulating bodies.
Innovation and technologies deployed across every region of the country
These promotion programs for inclusive ventures have to be made effective in every region of a country. Otherwise, there would be unwanted side effects regarding territorial growth, and this in a double sense.
On one hand, if some regions grew much more than others deepening regional differences that could already exist, concentrative tendencies expressed in migrations and transference of savings towards capital and central cities would be aggravated. At the same time, problems and tensions would magnify in large metropolitan areas in terms of housing, discrimination and exploitation of immigrants, provision of basic healthcare, educational, environmental sanitation and security services.
On the other hand, a territorially unbalanced growth would be wasting the huge production potential that nests in every region, a potential that is sometimes evident and others ignored or simply denied. Each territory has or can develop competitive advantages at compensatory costs. There are not few examples of neglected regions that due to a very diverse series of circumstances manage to mobilize its potential and become new driving forces of development.
An initial stage is to take advantage of the supply of natural resources to establish productive activities that will add value in the region itself. But the possibilities are beyond the known natural resources and others that could be discovered. Regional advantages can be developed based on the current abilities of its population or new ones that they could acquire. Thus the importance of counting with universities, technical schools, specialized institutes that keep up with the pace of regional development.
Their location can also be an important regional asset that can be enhanced by supplying transport, energy and communications’ infrastructure. Static considerations and, even worse, those biased appretiations on what constitutes a region’s productive potential are left far behind. Preconceptions, prejudices, discriminations swirl with spurious interests to neglect entire territories of a country that can and needs to be reversed.
What these lines seek to highlight is, once again, that every transformation, every innovation, every good sectorial policy, can generate negative side effects without intending to do so. This should not inhibit to move forward but, on the contrary, to firmly advance anticipating, preventing the eventual appearance of those unwanted side effects and, if we were convinced that they could appear, to act consequently. Particularly, if a strategic dimension were the one of moving towards a definitely inclusive society, the case that this article covers acquires relevance and significance: adopting state-of-the-art technology is strategic but, along with it, firmly promoting appropriate technologies people can reach.
