Does Premature Deindustrialization Matter? The Role of Manufacturing versus Services in Development
The shares of manufacturing in value added and employment across a range of developing economies peaked at lower levels of per capita income compared with their high-income, early-industrializer precursors. Based on the statistical analysis of inpu...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/800011537457179243/Does-Premature-Deindustrialization-Matter-The-Role-of-Manufacturing-versus-Services-in-Development http://hdl.handle.net/10986/30445 |
| Summary: | The shares of manufacturing in value
added and employment across a range of developing economies
peaked at lower levels of per capita income compared with
their high-income, early-industrializer precursors. Based on
the statistical analysis of input-output tables and
firm-level data, the paper contributes to the discussion on
whether this "premature deindustrialization"
matters by showing that: a) the premature declining share of
the manufacturing sector is largely not driven by a
statistical artifice whereby what was earlier subsumed in
manufacturing value added is now accounted for as service
sector contributions; b) Some features of manufacturing that
were thought of as uniquely special for development, such as
scale economies, exports, and innovation, are increasingly
shared by services sector firms. Yet, a given service
subsector is unlikely to provide opportunities for
productivity growth and job creation for unskilled labor
simultaneously; c) Some high-productivity services serve
final demand or derive demand from several sectors, while
others are more closely linked to a manufacturing base. |
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