Deindustrialization and innovation under globalization: An analysis of India’s catch up in manufacturing [Desindustrialização e inovação na globalização: uma análise do catch up indiano na manufatura]

K J Joseph, Kiran Kumar Kakarlapudi and Akhil Joseph
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Kiran Kumar Kakarlapudi: Gulati Institute of Finance and Taxation
Akhil Joseph: Wealthmaker Financial Services

Nova Economia, 2020, vol. 30, issue spe, 1199-1224

Abstract: There is a growing empirical evidence of premature deindustrialization in developing countries wherein the share of manufacturing in GDP and employment declined at a much lower level of per capita income as compared to the trend observed in developed countries. This study examined the manufacturing performance of India, which has been persistent with industrialization as its catch-up strategy. While the study finds no evidence of deindustrialization in the conventional sense, it presents compelling evidence in terms of wage share in value added and wage rate. Therefore, the study argues that a realistic analysis of deindustrialization should consider the quality of employment, wage share and wage rate along with employment share and GDP share. The study attributes deindustrialization in India as an outcome of its strategy to build international competitiveness based on price/wage cost advantage and the failure to build a vibrant learning, innovation and competence building system.

Keywords: India; deindustrialization; quality of employment; innovation (search for similar items in EconPapers)
JEL-codes: O14 O25 O33 O38 (search for similar items in EconPapers)
Date: 2020
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