14Advantages (Merits) of labour intensive technology
- It is appropriate in developing countries where capital is scarce and labour is abundant and cheap. This helps to reduce the production costs and check on mass unemployment prevailing in developing countries.
- It reduces income inequality among people and regions. This is because labour intensive industries employ a number of people and can easily be set up even in rural areas. This promotes balanced regional development.
- It increases employment opportunities in the economy. This is because it employs many people unlike capital intensive technology.
- It ensures proper exploitation and use of nonrenewable local idle resources. This helps to minimize the costs associated with environment degradation in form of quick resource exhaustion, noise, and air and water pollution resulting from the use of capital intensive technology.
- It reduces dependence on foreign expatriates and other external resources. This is because it employs simple tools which do not require complex skills in the production process and they are not imported.
- It helps the country to save foreign exchange. This is because simple tools and equipment are mainly used in the production process. This reduces foreign exchange out flow hence favourable balance of payment position of the country.
- It helps to control rural urban migration. This is because industries using labour intensive technology can easily be extended to rural areas,
- It is cheaper to use and maintain compared to capital intensive techniques. This is because workers do not require constant repairs and spare parts like machines. This helps to minimize on the costs of production in the economy.
- It widens the tax base of the country. This is because many people are employed and the government can easily tax the employment income in form of pay as you earn.
- It is suitable for developing countries with narrow markets. This is because it does not lead to massive production which would lead to wastage of resources.
- It enhances human skill development in the production process. This is because it encourages natural creativity and innovation which leads to skill formation and better management training. This promotes the development of the indigenous appropriate technology.
- It widens the market for the manufactured products in the long run. The wages earned by workers lead to increase in effective demand for commodities produced in the country. This in tum encourages investments and production.
- It is applicable at all stages of production and ill all sectors of the economy. For example it is applied in ploughing hilly grounds and tea picking where machines cannot be utilized.
- It is suitable in production activities which require human judgment especially in the service sector. For example in the medical field and courts of law where human judgment is highly required.
- It is appropriate to use in areas where there is land shortage where machines like tractors are not profitable to use.
- It encourages small scale production since it is easy and cheap to maintain. In addition it can easily be extended to rural areas.
CATEGORIES Economics
TAGS Dr. Bbosa Science
