Defining the problem: The determinants and inevitability of structural change

CIA-RDP87M00539R000700940012-6

Structural change is a far-reaching process in which the major components of a national economy shift in relative importance over time.

By altering the basic framework of an economic system, structural change can trigger shifts in a country’s internal political system as well as its political, economic and strategic relationships internationally.

  • Major structural changes can re-arrange the relative importance of entire sectors (manufacturing, services, agriculture).
  • Particular industries can also be affected (high-technology vs. basic industry, etc.).
  • Shifts between regions of large economies — or regions composed of several countries — are often the most visible evidence of structural change.

Because the proccess has so many implications, it can be difficult to define what is meant by “structural change.”

There are two elements that are usually involved in to all changes of this type:

  • The economic forces at work are broader than cyclical or market-oriented changes;
  • The changes are brought about by shifts in technological advance prompted by technological advance.

Technology can thus be considered a key driving element behind structural change — because the development and propagation of new technologies increase opportunities to invest and expand output, and so alter a country’s comparative advantage. Technology further enables gains in productivity, the principal factor in increased industrial dynamism.

Assessing Structural Change from the Standpoint of Intelligence Analysis

Structural change offers the Intelligence Community a useful framework to assess fundamental re-alignments in foreign countries’ internal economic and political systems as well as changes that these can trigger in their political, economic and strategic relationships internationally. It can help policymakers understand such complex issues as competitive problems and industrial re-structuring in Europe, North America, and East Asia; long-range changes in East-West relations; and the underpinnings of political development and instability in the Third World.

A central concern is that structural change almost inevitably has differential effects on different countries (and on regions within countries, as well as regions composed of several countries). Some nations will therefore fare better than others as they undergo structural change. The Intelligence Community has a responsibility to provide information and analysis to support policymakers seeking to ensure that the United States will be in the former category of countries in the coming years — as well as to anticipate and assess the possible consequences of being in the latter.

Source:

CIA-RDP87M00539R000700940012-6

Link:

https://www.cia.gov/readingroom/docs/CIA-RDP87M00539R000700940012-6.pdf

Internal Link:

Date:
July 4, 1985
Categories:
Economy
Tags:
CIA
Boxes:
CIA-RDP87M00539R
Years:
1985
Persons:
META DATA
Scroll to Top