ABSTRACT
An infusion of foreign technical expertise appears to offer a possible path to rapid and fairly efficient industrialization though it raises other well-known questions. This chapter introduces a number of issues in industrialization whose clarification depends on precise knowledge of the link between technology choice and productivity. It provides comparisons of the performance of plants in Kenya and the Philippines with that of developed country mills equipped with identical equipment. The chapter presents the magnitude of a number of productivity-depressing factors that account for the divergence between actual and best practice productivity. Based on the results from the Philippines, it explains a benefit-cost analysis of a project designed to augment productivity. More specifically, a firm’s productivity will be affected by conditions determined at the national or economy-wide level, by special industry conditions, by the managerial capacities of the firm, and finally, by the task-level productivity of individual workers.
