The notion of <italic>ingenuity gap</italic> in developmental discourse: Can economies adapt to scarcity?

Thomas F Homer-Dixon of the University of Toronto published his magnum opus The ingenuity gap in the September 1995 issue of Population and development review. In the background of a burgeoning human population in the third world, leading to a sub-sequent increase in material consumption, and its consequence being felt in diminishing and degrading natural resources, Homer-Dixon poses the question: Will societies be able to adapt? He constructs his argument based on three key notions derived from neoclassical growth theory. First, ideas are a factor of economic production; second, apart from ideas for new technologies, ideas for new and reformed institutions contribute to production; and, third, the production and diffusion of productive ideas is endogenous to the economic system and the broader social system that includes a society's politics and culture.

To understand the determinants of social adaptation to scarcity, Homer-Dixon stresses on society's ability to supply enough ideas, or ‘ingenuity.’ Examples of such ingenuity are replete. Israel combats water scarcity, through best practices in demand management, involving agricultural water management and virtual water imports, which involves import of commodities containing water. The industrial revolution in the first world was a hallmark of ingenuity, with the emerging social and economic processes of division of labour or comparative advantage in trade in place. The growth of the tiger economies, and steady emergence of India and China as future superpowers, depend on ingenuity as an input in the social production function.

Ingenuity is socially construed, and so is ‘scarcity’ (both economic and social). The demand for ingenuity depends entirely upon the state of development an economy or a society is going through. The higher the economic or social aspiration, the higher is the demand. Once ingenuity is demanded, society or the economy – through market forces or through state interventions – generate forces that supply ingenuity.

As scarcity worsens, some poor societies will face a widening ‘ingenuity gap’ between their need for and their supply of ingenuity. Scarcity often causes intense rivalries among interest groups and elite factions that impede the development and delivery of institutional solutions to resource problems. A society with a serious and chronic ingenuity gap will face declining social well-being and perhaps civil turmoil.

Editorial