Catherine N.

Anito

Topic: Domestic Policy and Problem

Labor Intensive versus Capital Intensive Technology

 Objective: Output or Employment

 Community Development and Cottage Industry
 Modern Technology

DOMESTIC POLICY AND PROBLEM

Labor-Intensive Versus Capital Intensive Technology

Labor Intensive Technology

 Also known as labor intensive technique

 It primarily uses larger amount of labor and only small doses of capital
 This technique is focused more on the labor aspect and less of capital
being required especially for the process of production
 It is noted that labor intensive methods of production are those that usually
requires a larger quantity of labor with only a given unit of capital
 This is also known to be a method of production that can be able to raise
output produced by using the same amount of capital but comparatively
greater amount of labor
 Shown in Figure 1 is the labor-intensive technology/technique
  This method is usually measured in terms of the proportion to the amount
of capital being required to produce certain goods and services
 The higher proportion of labor integrated in the production, the more-labor
intensive can the business be categorized
 In labor-intensive technology or technique, the staff can be used more
flexibly in order to meet the needs and preferences of the consumers
 There is the ‘personal touch’ or hands-on technique in handling and
producing products and services
 Can be considered to be relatively expensive as compared to machineries
and other equipment
 Since products and goods are ‘made to order’, the prices of products and
goods can be significantly higher
 The products are mainly produced by human workers
 Human creativity and effort are the primary factors needed for the
production of a certain goods or products
 One of the advantages of the labor-intensive technology is that
customized products are much easier to make
 Human workers can also use and integrate their own initiative and
problem-solving as well as decision-making skills

Capital Intensive Technology

 This method of labor/production is known to be advocated by Professor

Harvey Leibenstein, Paul Baran, Rostow, Hirschamn Maurice Dobb and
Mahalanobis
 This technique was considered to be indispensable for accelerating the
process of growth and speedy production
 Capital-intensive technology was also indicated to be
significant/necessary for less-developed countries
 It promotes scientific and technological advancement of the more
developed countries for faster industrialization
  The amount of capital used per unit of output and is significantly larger
than the amount of labor integrated
 Characterized by modern factory methods involved in producing consumer
goods and mechanized methods of constructing irrigation works, roads,
and other projects
 Shown in Figure 2 is the capital-intensive technology/technique

Figure 2.Capital-Intensive Technology/Technique

 The products are mainly produced by means of the use of machines and
robots
 This is characterized by having less employee wages and costs
 The quality of goods and products made can be standardized
 Machines and equipment can work continuously for 24/7

Objective: Output or Employment

 In understanding the relationship between output and employment, it is

first essential to determine the definition of output and employment
  Output – this pertains to the act involved in producing something, usually
a product or goods and is also known as the process involved in which
something is delivered
 This is also pertaining to the quantity of goods and services that are
produced within a given time period and is usually by a firm,
industry or a country
 This makes a particular country rich and increases the market
competitiveness of a country
 This is the result of various economic processes that uses inputs to
product a certain product or service
 This is closely related to the identical quantity of income generated
 Thus, output equals income
 In a country, there is the use of the GDP or the Gross Domestic
Product which is considered to be the widely used measure of
national output generated
 Employment – this pertains to an agreement between an individual and
another entity that requires the responsibilities, payment terms and
arrangement as well as the observance of the rules of the workplace and
is duly recognized by the government
 The state of being employed
 The relationship between an employee and an employer
 Employment contributes to economic growth
 As people are employed, they produce valuable goods and
services and in return, receive a considerable amount of wage
which they will use in spending or buying goods and other
necessities

Relationship between Output and Employment

 In order to produce more goods and services, it is necessary that there

should be an adequate employment or workforce
  There is the distinct relationship between output and employment as
output is achieved when an organization or a certain firm employs workers
who will be in charge to produce the intended products
 If the number of workers increases, then at the same time, the number of
products that can be produced will increase too
 Are determined by the production function and the demand for
labor/supply of labor in the economy
 High employment also equates to having higher number of goods that can
be produced and purchased over time
 Even though there is a higher aggregate demand that could increase
production, this will only result to an increase in the number of hours
worked for each employee and will not equate to an increase in their
number

Community Development and Cottage Industry

Community Development

 The concept of community development involved the process where

people come together to take action on what really matters for them
 This concept is rooted in the belief that all people should have an equal
access to health, wealth, justice, well-being and job opportunity
 The main purpose of community development is to build communities
based on equality, justice, and mutual respect
 This involved changing the relationships between ordinary people and the
people in authority or the government
 Involved the collective action of the members of the community to come
up with solutions to their problems
 Its primary aim is to improve the quality of life in a particular community
 The goals and objectives of the implementation of community
development includes – (1) to enhance awareness among the people; (2)
 provide holistic development; (3) to motivate people; (4) provide equality
for everyone; and (5) help people to motivate themselves

Cottage Industry

 The concept of cottage industry began in 1700s before the start of the
Industrial Revolution wherein production of goods was done on a very
small scale
 Pertains to a small-scale and decentralized manufacturing business that
is often operated at home instead of a purpose-built facility
 It is usually defined by the amount of investment that is required for it to
start and the number of people employed
 Examples of cottage industry includes – weaving cloth, sewing garments
and shoemaking; there is also the woodworking and carpentry
 This is usually considered to be a home-based unit of production relying
on human-propelled skills and technology
 Characterized by accessibility to various raw materials, proximity to
market and low costs of operation
 It is considered to be an important source of employment in the local
community and extra income for families especially in rural areas

Modern Technology

 Pertains to technological advances that promotes speed and convenience

 Refers to the collection of different and new ideas and techniques,
methods, skills, and processes that can help increase production of goods
and also increase productivity
 It also refers to the improved product of the application of science

Advantages of Modern Technology

 Easy Access to Communication – there is the development of different

forms and channels of communication which can take place in any part of
the world and in any given time
  Saves Time – the use of modern technology can be useful in promoting
convenience and saving time for people
 Cost-Efficiency – this is intended in purchasing machinery and
equipment while also ensuring the quality of the produced goods
 Promotes Innovation – the advanced features of modern technology no
longer set limits to the capacity of human beings in creating even
complicated things
 Increases Productivity –the use of various forms of modern technology
can be essential in helping laborers to finish tasks in the least possible
time and thus, having more time allotted for accomplishing other given
tasks

Disadvantages of Modern Technology

 Causes Distraction – the continuous use of modern technology and its

other forms causes distraction of people from work and their study and
thus promotes procrastination and laziness
 Reduces the Creativity of People – since everything can now be
downloaded and can be searched in just one click, this can reduce the
creativity of people and will just resort on just tailoring their work to the
ones they saw on the Internet
 Promotes Social Isolation of People – continuous use of modern forms
of technology can cause people to just do things on their own and in the
comfort of their rooms, “gluing their eyes” to their screens and refusing to
interact with other people
 Data Security and Privacy Concerns – this can exposes the personal
data and information of people and can be used for illegal and other
wrongdoings

References:

https://www.bbc.co.uk/bitesize/guides/zth78mn/revision/5
https://www.yourarticlelibrary.com/economics/labour-and-capital-intensive-
techniques-with-diagram/47504

https://www.information-age.com/modern-technology-advantages-
disadvantages-123465637/#:~:text=Advantages%20of%20technology&text=very
%20important%20point.-,Communication%20is%20thus%20enhanced%2C
%20and%20companies%20can%20communicate%20more%20easily,faster
%20especially%20with%20the%20internet.

https://brainly.in/question/2622387#:~:text=Cottage%20industries%20are
%20generally%20small,create%20extra%20income%20for%20them.

https://academic.oup.com/cdj/article-abstract/9/2/88/404026?
redirectedFrom=PDF

https://www.slideshare.net/HinaKaynat/objectives-of-community-development

https://thriveglobal.com/stories/advantages-and-disadvantages-of-modern-
technology/