Technological Retard in Small Least Developed Countries--Small Is Beautiful but Fragile?

This paper argued the technological retard and its influence to stagnant economic growth in small least-developed countries. First, we measured the technological development by UNIDO's TCI and found that the level of technical complexities in island or inland countries was lower than the normal level by 27 and 57 percent. We also found that the development of technical complexity is very important to industrialization in developing countries. Thus the stagnant technological improvement is one of the reasons for low growth of LDCs handicapped by smallness or isolation. Secondly, we analyzed the relation between stagnant technological improvement and the low growth of small LDCs by a simple growth model which combines the Romer-type nonlinear production function and human capital growth equation. The brain drain was explicitly considered a main hindrance of human capital formation in these LDCs.