Rethinking Development Policy: Deindustrialization, Servicification and Structural Transformation

Atolia, Manoj; Loungani, Prakash; Marquis, Milton H.; Papageorgiou, Chris

doi:10.5089/9781484377499.001

Cited by 14 publications

(11 citation statements)

References 15 publications

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“…Empirical evidence also suggests that between 1970 and 2010 the share of global manufacturing employment and output remained more or less constant at 14% and 17%, respectively, when several developing countries experienced deindustrialization (Felipe and Mehta 2016). Hence, deindustrialization in developing countries has been viewed in terms of their inability to compete under globalization with countries like China (Atolia et al 2018;Singh, 1977). To the extent that competitiveness is the key to survival in the globalized world, which in turn is governed by innovation, the relevance of an inquiry into the role of innovation in the observed deindustrialization cannot be overemphasized.…”

Section: Introductionmentioning

confidence: 99%

Deindustrialization and innovation under globalization: An analysis of India’s catch up in manufacturing

Joseph¹,

Kakarlapudi²,

Joseph

2020

Nova econ.

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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.

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Section: Introductionmentioning

confidence: 99%

Deindustrialization and innovation under globalization: An analysis of India’s catch up in manufacturing

Joseph¹,

Kakarlapudi²,

Joseph

2020

Nova econ.

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“…In the context of emerging economies, debates on the prospects of structural change and sustainable growth related to the tendency of 'deindustrialisation' have also gained momentum (Atolia et al, 2018;Tregenna, 2015Tregenna, , 2014Tregenna, , 2009. Interestingly, the renewed approach devising a rather strategic or 'developmental' state (Wade, 2018), which favours particular sectors and technologies, is in conflict with the policy trajectory followed by most emerging economies under the influence of the 'Washington Consensus' over past decades (Williamson, 2004).…”

Section: Introduction and Motivation Introduction And Motivationmentioning

confidence: 99%

Targeting Industrial Policy on Business Services: Rationales and Design for the Case of Chile

Madariaga¹

2020

SSRN Journal

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This article explores whether and how targeting industrial policy towards business services (BS) may contribute to economic development in Chile. To do so, the literature on rationales for targeted industrial policy and the relation between BS and economic development is reviewed. I stress that BS potential in economic development depends on productive linkages and associated capacity for generating knowledge and technological spillovers. Then, drawing on Chilean input-output tables for the years 1996 and 2016, an empirical assessment of productive linkages in the tradition of Hirschman is conducted. Three findings stand out from this exercise. First, BS exhibit relatively strong forward linkages and weak backward linkages, thus the sector is generally dependent on intermediate demand. Second, although the magnitude of its forward linkages have decreased, the relative importance of the sector within the domestic economy has increased over the period under study. It is argued that this result is counter-intuitive and affects the capacity of BS to contribute to a beneficial pathway of structural change in the Chilean economy. Third, when breaking down BS into subsectors, the linkages reveal important heterogeneity within the sector. It is suggested that this is relevant for discussing what industrial policy should target within BS. Moving forward, considerations for policy design are put forth. Focusing on rationales for intervention and other policy design aspects, the recent experience of industrial policy towards BS in Chile is analysed. Lastly, policy implications associated with the preceding discussion are further illustrated by drawing on the case of offshore services in Costa Rica. By bringing together these elements, the article's main contribution points to the role that productive linkages play in generating beneficial dynamics of economic development associated with BS.

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“…Given the much higher share of workers with only high school education or less, it will require time before workers acquire the skills needed to benefit from the complementarities brought up by smart machines and automation (Yusuf, 2017). Previous work has highlighted the risks of premature deindustrialisation and how automation may disrupt the income convergence process and hinder the ability of developing countries to exploit their labor-cost advantage to grow (Berg et al, 2018;Rodrik, 2016;Atolia et al, 2018;Palma, 2008). Without employment creation, automation, ditigalization and labor-saving technologies may foster inequality.…”

Section: Introductionmentioning

confidence: 99%

Is an Army of Robots Marching on Chinese Jobs?

Giuntella

Wang

2019

SSRN Journal

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Rethinking Development Policy: Deindustrialization, Servicification and Structural Transformation

Cited by 14 publications

References 15 publications

Deindustrialization and innovation under globalization: An analysis of India’s catch up in manufacturing

Deindustrialization and innovation under globalization: An analysis of India’s catch up in manufacturing

Targeting Industrial Policy on Business Services: Rationales and Design for the Case of Chile

Is an Army of Robots Marching on Chinese Jobs?

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