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TECHNOLOGY, GLOBALIZATION AND SUSTAINABLE DEVELOPMENT:
Transforming the Industrial State
Nicholas A. AshfordProfessor of Technology & Policy
Massachusetts Institute of Technology
Copyright © 2010 Nicholas A. Ashford
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Extractionindustries
ManufacturingAgriculture
TransportationEnergy
ServicesHousing
ICT
SOLUTIONSEducation & Human Resource Development
Industry InitiativesGovernment Intervention/Regulation
Stakeholder InvolvementFinancing Sustainable Development
Environmental InjusticeEconomic Inequity
Employment/Purchasing Power
Consumer Consumption
Commercial Consumption
Government ConsumptionPROBLEMS
Inadequate Goods & ServicesToxic PollutionClimate DisruptionResource DepletionBiodiversity/Ecosystem IntegrityEnvironmental InjusticeEmployment/Purchasing PowerEconomic Inequity
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MAJOR SYSTEMIC PROBLEMS Fragmentation of the knowledge base Inequality of access to economic & political power Tendency towards ‘Gerontocracy’
» technological and political ‘lock-in’» usually, but not always, accompanied by concentration of economic and political
power Market imperfections -- prices don’t reflect real costs of goods and
services Limitations of perfectly-working markets
» Disparate time horizons - costs now, benefits later» Delay in recognizing problems (Limits to Growth)» Inappropriate production & consumption patterns
Failure to engage individuals in the society to realize their human potential ~ social exclusion
Corruption
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Drivers of Economic Growth
Technological Innovation (Schumpeter’s ‘waves of creative destruction’)» exploiting innovative potential
Trade (Ricardo’s theory of comparative advantage)» exploiting excess capacity
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Environment
Technological change &
globalization(trade)
Work Economy
Copyright © 2006 by Nicholas A. Ashford.
Technological change and globalization (trade) as drivers of change within and between three operationally-important
dimensions of sustainability
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Cost
Performance
Current ExistingTechnology
Future Technology (Disrupting
Innovation)
C1
A B
CC2
P1 P2
Sustaining Innovation
New Sustaining Technology
The Efficient Frontier for Current and Future Technology Contrasting Sustaining and Disrupting Innovation
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The Importance of Workand the Workplace
Work is combined with physical and natural capital to produce goods & services.
The workplace is the place where comparative advantage is exchanged - i.e., a marketplace.
Work is the main means of distributing wealth and creating purchasing power.
Work provides a means of engagement in the society. The workplace provides an important social environment and
mechanism for enhancing self esteem. Industrial & economic policy, trade policy, and environmental
policy have important consequences for employment and OH&S
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Theoretical implications of decreasing labor content for employment and for the environment
Lower costs of goods and services Lower prices Increased demand and sale of goods and services
» in the original industry/market» in new markets (influenced by increases in disposable
income and producer-created demand) Are more workers hired than displaced?
» It depends on whether growth in production outstrips (capital) productiveness growth
May require or stimulate a continual throughput economy with increasing consumption» => adverse effects on environmental sustainability
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Improving labor Productivity
increase worker skills» increase labor productiveness» rewards to workers are increased
use/develop better hardware, software, and manufacturing systems» increase capital productiveness» workers’ share of profits are decreased
better matching of labor with natural/physical capital, and with information & communication systems» increase joint labor and capital productiveness» rewards are increased for both owners and workers» human-centered knowledge-based work has the potential, if
designed properly
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IIIIVV
Environment
Technological change &
globalization
Work Economy
Toxic PollutionClimate Change
Ecosystem DisruptionResource Depletion
● Skills● Wages● Purchasing Power● Job Security● Health and Safety● Job Satisfaction ● Number of Jobs
● Changing international division of labor
● Changes in the nature of work
● Development & environment (industrialization)● Investment & environment
● Trade & environment
● Improvements in competitiveness, productiveness, and the use of physical, natural, & human capital● Economic changes (arising from labor replacement & capital relocation● Financing growth and development
● Increased environmental footprint from the need to increase employment & industrial throughput
I
IIVI
● Regulation of Health, Safety & Environment Affects the Economyand Growth.
● Environmental/energy improvements create or change the nature of employment.
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TRANSFORMATION PROCESSES REQUIRE● trans-disciplinary expertise
● the emergence of new ways to meet the basic needs of the society,
● re-conceptualizing the basis of the economy
● the avoidance of agenda and pathway capture or lock-in by incumbent actors and ideology
● technological displacement and substitution of new for old technology
● in some cases, the displacement of not only the dominant products and technologies, but also the incumbent firms and public institutions
● co-optimization: co-evolution of technological and social systems, institutions complementary and mutually-reinforcing technological, organizational, institutional, and social innovations
● system changes that cut across problem areas -- competitiveness, environment, and employment -- and therefore also cut across sectors and firm divisions, as well as government departments and missions.
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Environmental Justice
Climate Change
Economic Inequality
Competitiveness (effective and efficient delivery of goods and
services)
Employment
Resource Depletion
Biodiversity/ Ecosystems
DOE
DOD/ DHSDOL/ED
USDA
DOC
DOC
Toxic Pollution
Government activity areas
Key:
Challenges confronting sustainable development
Peace and Security
Purchasing Power
(job creation) &
HHS/EPA
HUD