Microelectronics,industry, and the third world

As microelectronics revolutionises production in the developed countries, the traditional export successes of the Third world (eg garments and electronics) are threatened. That trade, which has grown rapidly in the past decade, relies heavily on the comparative advantage of low-wage high-skill labour. People are flexible—they can learn new skills and adapt to new fashions. But microprocessors are eroding that advantage. The newly industrialised countries, in particular, may be able to respond by competing in a wider range of exports. However, there is an urgent need for government intervention to ensure that the less developed countries acquire the software capabilities needed to make full use of the new technology.