Trouble in the Making?

Mary Hallward-Driemeier and Gaurav Nayyar

No 27946 in World Bank Publications - Books from The World Bank Group

Abstract: Globalization and new technologies are impacting the desirability and feasibility of what has historically been the most successful development strategy. Manufacturing has been seen as special, promising both productivity gains and job creation. But trade is slowing. Global value chains (GVC) are maturing. Robotics, artificial intelligence, 3D printing, and the Internet of things are shifting what makes locations attractive for production and threatening significant disruptions in employment. There is a risk of increased polarization, within countries and across countries. Shifting the attention from high-income countries, this report takes the perspective of developing countries to ask: -- If new technologies reduce the importance of low-wage labor, how can developing countries compete? -- Do countries need to industrialize to develop? -- How can countries at different levels of development take advantage of new opportunities? Development strategies need to broaden. Different manufacturing sub-sectors can still provide productivity growth or jobs; fewer can deliver both. Many of the pro-development characteristics traditionally associated with manufacturing--tradability, scale, innovation, learning-by-doing--are increasingly features of services. With faster diffusion of technology, it will be all the more important for countries to improve the enabling environment, remain open to trade, and support capabilities of firms and workers to ensure future prosperity is shared.

Keywords: Industry-Industrial; Economics; International; Economics; and; Trade-Export; Competitiveness; International; Economics; and; Trade-Globalization; and; Financial; Integration; International; Economics; and; Trade-Trade; Technology; and; Productivity; International; Economics; and; Trade-Trade; and; Services; Science; and; Technology; Development-Technology; Innovation (search for similar items in EconPapers)
Date: 2017
ISBN: 978-1-4648-1174-6
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Citations: View citations in EconPapers (49)

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