The role of manufacturing versus services in economic development

Hauge, Jostein

doi:10.4337/9781788976152.00007

Cited by 25 publications

(8 citation statements)

References 14 publications

(19 reference statements)

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“…These are reflected in Kaldor's three growth laws, which describe positive associations between (i) growth of manufacturing output and average GDP growth, in part explained by the shift of labour from agriculture to industry; (ii) growth of manufacturing output and manufacturing productivity, which is associated with increasing returns to scale in manufacturing, resulting from (a) its large scope for mechanisation and spatial agglomeration, and (b) cumulative production experience over time and large sector size, which thanks to the tradability of manufactures even economies without large domestic markets can achieve through export‐oriented industrialisation; and (iii) growth of manufacturing output and overall productivity of the economy, resulting from technological spillovers from manufacturing to other sectors and from stronger backward and forward linkages in manufacturing than in other economic sectors (e.g. Hauge & Chang, 2019).…”

Section: Industry‐led and Services‐led Development Strategies: A Literature Reviewmentioning

confidence: 99%

Development strategies for middle‐income countries in a digital world—Insights from modern trade economics

Mayer

2021

World Economy

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The digitalisation of economic activities, combined with a secular slowdown in the growth of global output and trade, reduces the potential of traditional export‐oriented manufacturing as a development strategy. This paper takes a trade economics perspective to outline a possible response to the changed nature of industrialisation. The outlined response currently applies mainly to middle‐income countries but deserves attention also in longer‐term development strategies of low‐income countries. The paper argues that digital technologies affect trade costs through various mechanisms, which apply differently to manufactures and services and determine decisions of multi‐product firms on what to produce for what market. Emphasising big data analysis of customer preferences as an input to manufacturing, the paper finds that (i) industrialisation and service‐oriented development strategies are complements, rather than substitutes; (ii) access to data on customer preferences is an asset for developing countries; and (iii) data governance, which harnesses the increasing dependence of manufacturing on data, and innovation policies, which give greater importance to indigenous innovation, crucially augment the potential of industrialisation as a development strategy in a digital era.

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Section: Industry‐led and Services‐led Development Strategies: A Literature Reviewmentioning

confidence: 99%

Development strategies for middle‐income countries in a digital world—Insights from modern trade economics

Mayer

2021

World Economy

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“…The Kaldorian limits of service economies refer to the various arguments sharing Kaldor's insight that manufacturing is special because of its unique growth-inducing properties which set it apart from any other productive activity (Cohen and Buigues, 2014;Hauge and Chang, 2019;Pisano and Shih, 2012). For Kaldor (1967), in agriculture and services productivity growth relies on external technological developments, but in manufacturing it is selfgenerated.…”

Section: The Kaldorian Limitsmentioning

confidence: 99%

From the post-industrial prophecy to the de-industrial nightmare: Stagnation, the manufacturing fetish and the limits of capitalist wealth

Moraitis

2021

Competition & Change

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The post-2008 era saw a return of the manufacturing fetish, the idea that manufacturing constitutes the flywheel of growth without which no nation can thrive. Across the Global North and South, voices are calling to reverse deindustrialization and revive manufacturing. While today deindustrialization is met with anxiety, in the 1930s economists predicted deindustrialization but interpreted it as a liberating process leading to a post-industrial age based on material abundance and widespread economic security. Far from delivering this vision, deindustrialization actually produces a precarious economic order driven by labour precarity, economic stagnation and lost development opportunities for the Global South. What can be termed the Baumolian and Kaldorian frameworks, attribute this precarious reality to services’ inability to replace manufacturing as a growth engine given their technologically stagnant nature. However, this article argues that, by focusing on the technical aspects of service economies, such views overlook the social limits of the capitalist economy and its historically specific conception of wealth, value. As capitalism matures, productivity becomes an increasingly inadequate form of augmenting social wealth as it results in great increases in physical output but counterintuitively undermines the expansion of value. Capitalism is underpinned by a secular movement towards declining dynamism, as it increasingly struggles to maintain its former economic vigour. Stagnation and heightened labour precarity are not merely the product of tertiarization but symptoms of capitalism’s declining trajectory.

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“…Em decorrência das economias de escalas, é mais lucrativo para uma indústria adquirir alguns serviços de fornecedores especializados ao invés de produzi-los (NAYYAR, 2013;HAUGE;CHANG, 2019). Assim, a fabricação de produtos industriais mais complexos demanda mais conhecimentos, estimulando o crescimento do setor por meio do aumento da demanda por serviços especializados (GIOVANINI et al, 2016).…”

Section: Referencial Teóricounclassified

“…Os desenvolvimentos tecnológicos e a redução dos custos de transações possibilitaram que o comércio de serviços, antes limitado pela proximidade física entre comprador e vendedor, se tornassem comercializáveis da mesma forma que os bens, principalmente os serviços de informação, telecomunicações, financeiros, seguros e negócios (BHAGWATI, 1984;KHARAS, 2010;HAUGE;CHANG, 2019). Assim, tais serviços passaram a gerar divisas e contribuir para melhorar o BP.…”

Section: Referencial Teóricounclassified

Indústria, Serviços e Crescimento: Evidências para o Brasil no período de 1996 a 2020

Rodrigues¹,

Veríssimo²

2021

Blucher Engineering Proceedings

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A literatura baseada em Kaldor apresenta evidências da relevância do setor industrial para o crescimento econômico. Porém, estudos recentes mostram perspectivas do setor de serviços como o novo motor do crescimento. O presente estudo tem como objetivo testar empiricamente o impacto dos setores industrial e de serviços sobre o crescimento econômico brasileiro. Para tanto, são realizadas estimações econométricas usando o método ARDL e dados trimestrais no período de 1996 a 2020. Considerando a heterogeneidade interna dos setores, os testes também foram realizados para segmentos específicos da indústria e dos serviços. As evidências sinalizam que tanto a indústria de transformação quanto o setor de serviços, principalmente o segmento de transporte, armazenagem e correio, contribuem para o crescimento econômico no longo prazo, mas este é mais sensível ao aumento da participação dos serviços comparativamente à indústria. Tais evidências corroboram a hipótese de que o setor de serviços é o novo "motor do crescimento".

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The role of manufacturing versus services in economic development

Cited by 25 publications

References 14 publications

Development strategies for middle‐income countries in a digital world—Insights from modern trade economics

Development strategies for middle‐income countries in a digital world—Insights from modern trade economics

From the post-industrial prophecy to the de-industrial nightmare: Stagnation, the manufacturing fetish and the limits of capitalist wealth

Indústria, Serviços e Crescimento: Evidências para o Brasil no período de 1996 a 2020

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