Appropriate technology and development

Schumacher's initial concept of intermediate technology was created as a critique of the currently prevailing development strategies which focused on maximizing aggregate economic growth through increases to overall measurements of a country's economy, such as gross domestic product (GDP).^[21] Developed countries became aware of the situation of developing countries during and in the years following World War II. Based on the continuing rise in income levels in Western countries since the Industrial Revolution, developed countries embarked on a campaign of massive transfers of capital and technology to developing countries in order to force a rapid industrialization intended to result in an economic "take-off" in the developing countries.^[21][25]

However, by the late 1960s it was becoming clear this development method had not worked as expected and a growing number of development experts and national policy makers were recognizing it as a potential cause of increasing poverty and income inequality in developing countries.^[26] In many countries, this influx of technology had increased the overall economic capacity of the country. However, it had created a dual or two-tiered economy with pronounced division between the classes. The foreign technology imports were only benefiting a small minority of urban elites. This was also increasing urbanization with the rural poor moving to urban cities in hope of more financial opportunities. The increased strain on urban infrastructures and public services led to "increasing squalor, severe impacts on public health and distortions in the social structure."^[20]

Appropriate technology was meant to address four problems: extreme poverty, starvation, unemployment and urban migration. Schumacher saw the main purpose for economic development programs was the eradication of extreme poverty and he saw a clear connection between mass unemployment and extreme poverty. Schumacher sought to shift development efforts from a bias towards urban areas and on increasing the output per laborer to focusing on rural areas (where a majority of the population still lived) and on increasing employment.^[27]