(DP 1999-04) Technological Change and Industry Structure in the Philippines: 1969-1985

Abstract

The paper outlines the results of Stage I of the research program into The Relationship between Technological Change and Economic Development: A Case Study of the Philippines: Part I of this paper outlines the analytical framework adopted for the analysis which focuses upon changes in the vector of technical coefficients derived from the Philippines’ I-O tables for 1969-1985 relating the observed pattern of change to one of the ‘stylized facts’ of economic development- the "increasing roundaboutness of production". The results of the analysis suggest that over this period, the changes in the technical coefficients were largely inconsistent with that standard of development. It is suggested that this outcome is largely the result of weak organizational and technical skills at the level of the firm which then manifest themselves in inappropriate responses to changes in the level of activity- particularly apparent in the case of manufacturing industries. By highlighting the interdependence between production processes it is possible to determine where weak development in one sector- such as food processing - in inhibiting the development of others - such as agriculture. A major problem stressed with the current policy of improving agricultural productivity is the lack of a reasonably up-to-date I-O table from which problems associated with that interdependence can be gauged.