The Technology Gap with Developing Countries: Eric Verhoogen Researches Industrial Development

Tying the importance of economics to technological innovation is key to advancing developing countries. Eric Verhoogen’s research asks why firms in industrial countries aren’t adopting technologies already developed by richer countries. He tells listeners about some microeconomics concepts his research explores.

For example, he explains

• How a variety of incentives within a company can inhibit adopting a new technology,
• How understanding and eradicating organizational barriers to concepts like profit sharing could lift such barriers, and
• Why connecting microeconomics concepts with effective government intervention is essential in approaching pay-for-performance export incentives.

Eric Verhoogen is a professor in the Department of Economics and School of International and Public Affairs at Columbia University. He researches the importance of economics in adopting new technologies by examining organizational barriers to these technologies. He explains this research by telling listeners about a specific example involving the introduction of a less wasteful technology into soccer ball production in several Pakistani firms.

He describes his particular research experiment that resulted in pinpointing the barrier to implementing this technology on workers who would lose money in their per-piece system. He discusses why this was the case and what was different about one firm that chose to take on this technology and why that was significant.

His example relays other barriers to taking on new technology such as owners unwilling to undergo too much organizational reworking as well as the mysteries behind the lack of much “knowledge spill over.” Such research opens up keys to ways government could effectively intervene in terms of tariff reduction and trade organizations.

He also discusses his other research projects such as incentivizing surgical goods innovation through a contest and a project in Tunisia on pay-for-performance export production and subsidies.

To find out more, see his Columbia website, columbia.edu/~ev2124/, and find him on Twitter as @EricVerhoogen.

Available on Apple Podcasts: apple.co/2Os0myK