What is the correct proportion between industrial and postindustrial development?
Almost 80% of the US population are involved in the non-manufacturing sector, i.e., research, education, public health, and culture, which provides for the all-round development of human beings. Approximately the same figures apply to other advanced countries. What comes to the fore in modern society is such a qualitatively new productive resource as information and knowledge. On the other hand, what turned the latter into the chief productive resource is the emergence of new notions, such as intellectual product, intellectual labor, intellectual property, and intellectual capital.
All this radically changes the place of man in society. While in an industrial economy one faces a huge amount of the means of production, intellectual and human capital allows one to organically combine his/her labor and capital, that is, knowledge and experience. Humanity has now reached the stage when the development of society is determined by the development, rising material, cultural and spiritual level of man. Moreover, what is typical of modern society is the decline of market relations and, above all, of their basic law, i.e., the law of value and equivalent exchange. The dominance of the non-manufacturing sector means that services produced, as a rule, by intellectual and quite often creative activities become the most widespread product of labor. It is difficult, if not impossible, to estimate expenses for services. Therefore, the overall analysis of the new economy shows that the industrial and postindustrial economies are radically different and have opposite characteristic features. Ukraine is still at the industrial stage; moreover, a profound and protracted crisis has thrown it far back. This means the difference between industrial and postindustrial development is still more striking here. This provides ample grounds for disbelieving in the likelihood of the postindustrial transformation of the Ukrainian economy. Some people think one must first lay the institutional, organizational, and logistical groundwork and only then begin postindustrial transformation.
Naturally, this process will take quite some time. But it would be a major mistake not to see that the law of value is undergoing serious changes in both the developed countries and Ukraine. The ever- increasing intellectualization, importance, and impact of creative labor have brought about a situation such that prices are being determined by product demand rather than by production costs. A new category, knowledge-induced value, has emerged. It increasingly dominates in the production of clothes, footwear, food, automobiles, household appliances, etc., such that the high technological level of manufacturing must be complemented by an appealing design. We more and more pay for a quality product not so much in proportion to production costs as according to the image of a firm, designer, or couturier, i.e., we pay for the trademark that offers better services.
To build a dominant non-manufacturing sector as part of a new society, we must retool the economy and achieve so high a labor efficiency that about a third of those employed could maintain industrial output at a level that would fully meet the requirements of society in material goods. To do so, we must achieve the economic indices that have already become normal in the developed countries. While in the European Union the average per capita GDP is $20,000 and in some cases even twice as much, it is $865 in Ukraine. This makes transition to the postindustrial phase a remote possibility in this country. Yet this in no way means that we should not make wide use of information, expertise, intellectual capital, and property as a qualitatively new productive resource. Ukraine has lost out on scientific and legal standardization as well as practical regulation of intellectual property relations. Hence, the scientific substantiation and maximal utilization of a series of postindustrial processes is an acute necessity without which no forward movement is ever possible.
By breaking through to the postindustrial stage, the developed countries outlined the direction and ways for the further progress of civilization. Other countries cannot march forward if they ignore the historical imperative and disregard the direction and ways of civilization’s progress. The main problem is not whether or not postindustrial processes occur. Of far greater importance is how actively and intensively we utilize them in the economic practice. Our leadership proudly announces that Ukraine is the word’s fourth largest country in terms of the number of computer programmers. But what is the result? Unfortunately, the powerful potential has been largely squandered. A great number of programmers have emigrated. While Ukraine has about one million computers, Poland and Russia have nine million each, i.e., nine times as many. The low level of computerization brings along a small number of Internet users, although this is one of the main signs of an advanced civilization. This number is about 1.5-2% here and 31% in Europe.
While we still ponder whether we can dream of, let alone develop, postindustrial processes, India has become one of the world leaders in the output of software over the past 15-20 years, exporting a more than $10 billion worth of this intellectual product. Incidentally, Indians also studied at our universities’ cybernetics departments. The result is that, while postindustrial processes is still an “illusion and romanticism” in Ukraine, they have found a vast and fertile ground in India.
By failing to take advantage of a powerful computer-science potential and being acutely short of hard currency, we focused on producing metal which became our main item of export and hard currency earnings. It takes great and strenuous public efforts to produce millions of tons of ore and coal, transport huge cargoes by railway, and keep mammoth steel mills working 24 hours a day. What a benefit we could reap if we managed to combine a powerful metallurgical industry with modern intellectual technologies. Regrettably, this is not our only miscalculation. May bookstores have been closed since 1993. For example, while there were 95 of them in Kyiv in 1991, now there are only eleven.
Misunderstanding or ignoring the laws of civilization progress and, first of all, postindustrial processes can cost our country too high a price. We must address this problem before it is too late.
