Since the proportion of available capital to labor is low in LDCs compared
to the developed countries, the most appropriate techniques for
LDCs, from an economic point of view, are likely to be the laborintensive
ones. If we suppose that there is a single most efficient technique
for each industry, and if it technologically requires labor and
capital in fixed proportions, the most appropriate industries for LDCs
are likely to be the labor-intensive ones. This is because of the close
correspondence between industries and their technological requirements.
On an international scale this appropriateness is given some
support by the Heckscher-Ohlin theorem of international specialization
in production. As is well known, this theorem indicates (subject to
various assusmptions) that countries should specialize in the production
of goods that make use of their relatively abundant factors of
production.