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 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.
| Main Authors: | , , |
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| Format: | Working Paper biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018-09
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| Subjects: | DEINDUSTRIALIZATION, SERVICES SECTOR, MANUFACTURING, DEVELOPMENT, PRODUCTIVITY GROWTH, INNOVATION, LABOR PRODUCTIVITY, |
| Online Access: | http://documents.worldbank.org/curated/en/800011537457179243/Does-Premature-Deindustrialization-Matter-The-Role-of-Manufacturing-versus-Services-in-Development https://hdl.handle.net/10986/30445 |
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