In this article, we will discuss the meaning, nature, need and importance of intermediate technique.

Meaning of Intermediate Technique:

Prof. E.F. Schumpeter, in his book “Small is Beautiful’, advocated intermediate technique for underdeveloped countries.

According to him, from the viewpoint of sustained growth, neither the labour intensive nor the capital intensive technique is entirely feasible. Rising unemployment in these countries suggests the adoption of intermediate technique. Intermediate Technology refers to technology which involves around £70 to £ 100 equipment cost per average of work place”.

Illustrating this technique, Prof. Schumpeter assumes the conventional technique in less developed countries to be £1 technique’ and modern technique in advanced countries technique to be £1000 technique. The gap between the two techniques is so wide that it is difficult to switch over from one to the other. In any endeavour to adopt £1000 technique in underdeveloped countries, the £1- technique is virtually destroyed.


But, at the same time, it is not possible to fully adopt the modern technique. The less developed countries are thus in a very helpless situation. These countries need a technique which is in between the two extreme techniques, say the £100-technique under these circumstances. Intermediate technique is more productive than the conventional technique and more useful than the modern technique.

Nature of Intermediate Technique:

The nature of intermediate technique can be judged from the following;

(i) Work places of intermediate techniques are to be established in villages and towns, not in big cities.

(ii) These workplaces should involve more workers, low costs and minimum inputs particularly the capital.


(iii) Methods of production should be simple so that the demand for “High Skills” or highly educated persons keeps low. Process of production, organisation, supply of raw material, credit and other activities must be as simple as possible.

(iv) Production should largely be based upon local materials and local workers.

(v) There must be facility of repair at door step.

Need of Intermediate Technique:

The need of intermediate technique is related to the following causes:

(1) Unemployment:


‘Underemployment’ and ‘disguised unemployment’ are the distinguishing features of underdeveloped countries. To eradicate this problem, it is important that enterprises requiring less capital are spread in the country. This requires the adoption of intermediate technique in such countries.

(2) Migration from Rural Areas:

In underdeveloped countries, people have the tendency to migrate from rural to urban areas in search of jobs. This lead to open unemployment in the urban areas, besides the related problems of housing etc. It is required that intermediate technology is adopted to check this problem. Further more job opportunities may be created in the rural area to absorb maximum rural people.

(3) Scarcity of Capital:

‘Capital is miserably scarce in underdeveloped countries. But modern enterprises need huge capital investment. Therefore, need of the hour is that such enterprises should be established who require comparatively less capital. Intermediate technology requires less-capital and can be easily adopted.

(4) Simple Process:

In underdeveloped countries generally, skilled workers are in scarce supply. It is therefore advisable that simple methods of production may be adopted. Intermediate technology conforms to the simple methods of production. It needs simple tools and equipment’s. Moreover, they can be easily repaired and maintained at local level.

Importance of Intermediate Technique:

The development of intermediate technique does not mean the adoption of modern technique of production. This only implies that in underdeveloped countries, ‘simple processed’ goods are commonly demanded, and therefore more of such goods should be produced.

According to Prof. Schumpeter “The idea of intermediate technology does not imply simply a ‘going back’ in history to methods now out-dated. The development of an intermediate technology therefore means a genuine forward movement into new territory where enormous cost and complication of production methods for the sake of labour saving and job elimination is avoided.”

Therefore, following argument will clarify the significance of intermediate technology in underdeveloped countries. They are;

1. Dual Economy:

Dual economy is expected to exist in under developed countries for a fairly long period of time. Modern technology is not applicable across all sectors of such an economy. So intermediate technology is to be inevitably adopted in such a system of the economy.

2. Traditional Sector:

Generally, it is observed that traditional sector of the dual economies is not developed but it simply disintegrates. As a result, unemployment would increase and people will start migrating from rural to the urban areas in large numbers. This would adversely affect the living in the urban areas. Thus, intermediate technology is the only solution for the development of traditional sector and to check the problems of unemployment and urbanisation simultaneously.

3. Improvement of the Poors :


Intermediate technology is important for improving the economic conditions of poor people in less developed countries.

4. Other Miscellaneous Problems:

The underdeveloped countries who face with the problem of scarcity of capital and abundance of labour, intermediate technology should be adopted to achieve the objective of full employment.

In short, Prof. Gadgil has also favoured. “Intermediate Technology should be a national goal. It should be used in large sector of the economy.”

Prof. Schumpeter has tried to build up a case for the use of intermediate technology in U.D.C’s and advocated the need of such technology for regional development.


To conclude the discussion, the intermediate technology should be labour intensive which is suitable to rural areas. In other words, such technology would be more appropriate to produce these commodities which are the dire need of the people living in rural and semi urban areas. But, at the same time, it is a misnomer to consider that modern technology pertains to heavy industries only.

The experience of advanced countries from U.S.A. to Japan shows that there are small industrial units and agricultural areas where low capital intensity techniques are used.

U.N. expert, therefore, asserts that, “Efforts should be directed towards choosing the simplest of such alternative techniques the sturdiest of available capital equipment, the small type of plant consistent with technical efficiency, the technology that makes the best use of the most plentiful factors of production.”