What is Development?
Development is the rise of a nation to meet the West and other developed countries as an economic equal based on the managerial and entrepreneurial leadership of its own indigenous people, as China is doing.
What is Underdevelopment?
Persistent underdevelopment is a permanent shortage of effective managerial and entrepreneurial talent in a country. The abundant supply of effective managerial talent is the essential precondition for the type of growth that will develop a country to the level of developed countries. Without it, developing countries are trapped in underdevelopment no matter what else they might try or do to escape. Underdevelopment is persistent because effective managerial leadership is in short supply.
How can missing managerial talent be acquired?
Currently, effective managerial talent is provided in two ways:
1) By expatriates from developed countries that may or may not be temporary, transient workers and
2) By the diaspora of expatriate countries who have made their home in developing countries.
Both methods have not provided enough managerial leadership to facilitate development as defined here.
The enduring way to provide managerial leadership is to systematically train indigenous populations in large numbers to be effective managers. Higher education claims to do that but evidence to support this claim is lacking. Most developing countries have been educating their people in local and overseas universities for decades and now have large populations of graduates living in their midst. Yet, underdevelopment remains persistent. Lesson learned: More of the same type of higher education will continue to fail.
Is “globalization” the solution for underdevelopment?
For developing countries, globalization is the control of industry by foreign capital interests and by expatriate managers from developed countries. By this definition, the petroleum industry in developing countries falls under globalization. For generations, capital and managerial leadership for this and other large-scale operations have been provided mainly by multinational interests from developed countries. Globalization has reduced poverty for many in developing countries and provides revenue for governments. But it has not affected the shortage of managerial talent that defines underdevelopment. Local employees of globalization interests do not leave to start competitive operations. The efficiencies of globalization operations have not been spread across the economy by indigenous managerial talent in the numbers required for development as defined here. Globalization is not development. At best, it leaves the majority in poverty and much of the rest in the “middle income trap.” Countries caught in the middle-income trap have a prosperous and affluent minority population of Western and or Asian managers, administrators, entrepreneurs, and their indigenous cohorts in the professions. But the bulk of the indigenous majority is far less prosperous and stuck in economic stagnation, if not poverty.
Does steadily increasing globalization add up to development?
No. Globalization is not gradual development. When the footprint of industry is expanded in a developing country by expatriate-led administrative structures, the scarcity of indigenous managerial competence remains. GDP may increase and poverty may be reduced, but the country will not someday catch up with developed countries. A large and increasing base of competent indigenous managers is required for that to happen.
Is Modernization the same as Development?
For developed countries the answer may be yes. But the answer is no for developing countries. Colonialism eliminated the choice of economic models for developing countries and imposed the current economic model along with its rules for political and military organization, social institutions, national borders, markets, and other systems and structures. For developing countries, modernization is the mere existence of these systems and structures. Development is when these existing systems and structures are maintained with the effectiveness of developed countries, and then propagated with steadily improving efficiency. By definition, the managerial talent needed to do that is scarce in developing countries. Effective managerial talent is supplied mostly by the expatriate diaspora of developed countries, but only insufficiently due to the high cost and not enough to facilitate development as defined here. Modernization can procure only limited and shallow growth because there are not enough expatriates to sustain, multiply, and propagate its potential. So, the opportunities that modernization presents are not fully availed. Moreover, when expatriate managerial supervision is lost for any reason, modernization structures and systems stagnate and deteriorate.
Does modernization add up to development?
Like globalization, modernization is not incremental development. Since independence, developing countries have generally embraced the bureaucracy and institutions of modernization and expanded the projects and infrastructure of modernization. None of that has increased the supply of indigenous managerial leadership that is effective. Hence, modernization projects will not cause a developing country to eventually catch up with developed countries.