One way that less developed countries catch up with the growth of the more developed countries is by adopting the technology of the developed countries. On average, however, developed countries are capital-rich and laborshort relative to the developing nations. Think of the kinds of technology that a typical developing country with a short supply of capital and a large marginally employed labor force would find when “shopping” for technology in a more developed country. As a hint, the Japanese have developed the field of robotics such as assembly line machines. Such machines are designed to replace expensive workers with capital (robots) to lower the overall cost of production. In what ways does it help a developing country to transfer and use a new technology in its country?
What are the costs?