Technological progress produces mixed results in rural areas
Urban technological progress raises the competitive advantage of urban firms over rural firms in product market competition, and can lead to a brain drain in rural areas, Oudom Hean of Ohio State University in the US said at a recent conference in Ho Chi Minh City.
Vietnam’s Business & Economics Research Conference 2019 is the premier Vietnamese conference for academics, policymakers, practitioners and postgraduate students. (Photo courtesy of HCM City Open University)
HCMCity (VNS/VNA) - Urban technological progress raises thecompetitive advantage of urban firms over rural firms in product marketcompetition, and can lead to a brain drain in ruralareas, Oudom Hean of Ohio State University in the US said at a recentconference in Ho Chi Minh City.
Speaking at the Vietnam’s Business & Economics Research Conference2019 held on July 18-20, Hean explained that technological progress in bothurban and rural areas increases productivity and leads to higherwages.
However, according to Hean, such progress has a mixed impact on ruralareas. “Progress in urban technology also exerts an ambiguous effect,a brain drain, on the rural labour market."
The innovative urban region offers higher wages, leading to out-migration fromthe rural region, and out-migration leads to lower rural human capital andreduced unemployment for rural workers.
Without fully accounting for these adverse effects, policies aimed atincreasing regional employment by technological advancement might haveundesirable outcomes.
Policymakers need to consider these effects carefully to avoid unintendedconsequences.
Vo Thanh Tam of the University of Economics in HCM City said that Industry4.0 was gaining pace in the city and country. However, the workforce,especially in manufacturing, still had limitations in qualifications andskills, and was unable to keep up with new trends.
Research by Tam and his colleague has shown that employees' cognitive,social and behavioural skills are very important for employers, butmany employees in the country lack this skill set.
The three-day conference is also featuring research in finance,corporate governance, labour economics, foreign direct investmentand trade, energy economics and others.
Research works are conducted by scholars from domestic and foreignuniversities, research centres and departments.- VNS/VNA
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