ABSTRACT The subject of this study is the impact of technical change on the productivity of the manufacturing industry in Imo State of Nigeria. The manufacturing industry is the leading sector in the industrialized countries. It is expected to stimulate and sustain the growth of the Nigerian economy. The Nigerian economy is in dire need of development but the sectors that should produce this effect, particularly the manufacturing industry, has exhibited disappointing performance. The Nigerian economy has experienced stunted growth since independence in 1960, such that even during he "oil boom" era the country did not experience a positive growth rate consistently for an average of six years. The objective of this study , therefore is, to investigate the impact of technological progress (Hick's neutral disembodied change) on the productivity of selected manufacturing firms in Imo State of Nigeria in 2005. With this result, a prediction of the effect on manufacturing industry in Nigeria will be made. To achieve the set objective, we made a case study of the manufacturing industry in Imo State of Nigeria. Of the 104 firms that we gave questionl~aires only 21 of them responded, even within the elongated period of four months of consistent visit and appeal. Some of the firms on the record had closed down due to shortage of raw materials and spare parts. Also none of the multinational corpcrations returned our questionnaires. The data set collected from these 21 firms were 60 and we used the constant elasticity of substitution production function was used and Stata econometric package also was used to carry out the analysis. The model focused on Hick's disembodied neutral technical change, which emphasizes continuous improvement on existing capital assets. The findhgs show that technical change did not make a significant contribution to the productivity of the manufacturing industry in Nigeria within 2005 in which the cross-section study was based. It is recommended that technology policy should be separated from policies on science and technology and education and training. This policy should be based in the firms. It is also recommended that the capital goods industry should be fortified and that Nigerians working abroad and who have acquired skills in technology should be attracted home by the government and the manufacturing firms. Furthermore, goods manufactured by these efficient firms that use improved techrrology should be exported. The export of manufactured goods, will in turn, yield technical change.
