The Chemical Industry Goes Abroad

ONE of the issues in the field of economic development that has attracted considerable attention in recent years is how far advanced Western methods of production should be adopted in any country which is technologically backward, which is short of capital and foreign exchange, and has an ample supply of labour. A large body of opinion among economic writers supports the view that the factor endowments found in underdeveloped countries should lead these countries to adopt for their new industries methods of production which do not require heavy investments nor foreign exchange, which use proportionately large amounts of labour, and which do not make unwarranted demands on relatively scarce technical and managerial personnel. Other writers, on the other hand, think that the more highly productive, more advanced techniques should be used and that to rule them out in favour of 'less efficient' ones would just perpetuate inefficiency and would lead, in the long run, to a lower rate of growth. A third type of approach, perhaps more pragmatic, says that some industries should be set up in the most modern way while traditional, manual methods should be retained in others, both sectors coexisting under the aegis of the State (this is the policy of the Indian Government). It is not attempted here to provide a general answer to this issue; the author doubts very much whether a blanket answer can be given and is well aware that economic aspects are not the only ones that should be considered since social and political factors, for instance, have a great part to play in the strategy of development. But the discussion of what techniques should be adopted in specific cases should be based on a better knowledge of modern techniques and modern processes and their demands on resources and on the people who are to run operations. There is a need to study particular industries, to obtain data at the level of the plant, to consider separately different groups of activities process, materials handling, packing, maintenance, the provision of services in their design and operation, and to be aware of the attitudes and procedures of the designers of plants. The author's research is intended to contribute to these aspects by tapping a source which is potentially rich: the experience of British firms that have installed plants abroad in recent years. As a part of a