It has been observed that the main cause of poverty in underdeveloped countries is that they suffer from the technological backwardness.

A specific level of technological advancement is the necessary pre-condition for rapid growth.

Therefore, the task of technological change in underdeveloped countries is difficult because the social set up in backward pre-industrial economies is not conducive to technological improvements on any significant scale. It is observed that the absence of proper technological change retards the economic growth.

Thus, it is imperative either to explore new technology or import technology from industrially advanced countries to promote the economic growth. The U.N. experts observed that, “unless special effort is made, the process of technological development in the UDC’s will be relatively slow and the gap in technology will continue to grow wider as the cumulative scientific progress of developed countries accelerates.”

Meaning of Technological Change:


Technological change means the technical knowledge used in the production of capital and machinery. The various changes in technology leads to an increase in the productivity of labour, capital and other production factors. Technological progress comprises of creation of skill, new means of production, new uses of raw materials and the widespread use of machinery.

The technology is the most powerful means of wresting power from nature in all possible ways. It strengthens the facilities of man. Prof. Frankel assumes that the, “Technological change is not a mere improvement in the technical know-how. It means much more than this. It should be preceded by sociological change also, a willingness and desire on the part of community to modify their social, political and administrative institutions so as to make them fit with new techniques of production and faster tempo of economic activity.” Technology, according to J. P. Dewhurts, in fact, can be thought of as the change in the production process of material and human skills.

Process of Technological Change:

Technological changes devise new goods and techniques of production. The development of new technical knowledge can be defined as the growth of the new technique that can produce goods and services at lesser cost of production.

The process of growth of technical knowledge can be divided into following stages:


(a) Formulation of scientific principles

(b) Application of these principles to give technical problems

(c) Development of technical inventions to the point of commercial exploitation.

The first stage is the advancement in scientific knowledge, the second is that of the application of this knowledge to some useful purposes and third is the commercialization of invention which is called innovation. This has a great significance in the process of development. Schumpeter has distinguished between invention and innovation. Invention implies the discovery of new technique while innovation is practical application of invention in production for market.


It may be called commercialization that originates from scientific advancement. Invention is scientific fact while innovation is economic fact. Inventions are carried on by the inventors large capital investments at every stage as it needs not only a scientific attitude but an attitude of the community and an entrepreneurial skill of high order with the ability to understand the possibilities of employing scientific incentives for commercial purposes.