Mary Hallward-Driemeier

Gaurav Nayyar

Elwyn Davies

Manufacturing-led development has provided the traditional model for creating jobs and prosperity. But in the past three decades the conventional pattern of structural transformation has changed, with the services sector growing faster than the manufacturing sector. This raises critical questions about the ability of developing economies to close productivity gaps with advanced economies and to create good jobs for more people. At Your Service? The Promise of Services-Led Development (www.worldbank.org/services-led-development) assesses the scope of a services-driven development model and policy directions that can maximize the model’s potential.

The Promise of Services-Led Development

At Your Service?

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

The Future of Manufacturing-led Development

Trouble in the Making?

Patrick Low

Albert Park

Global value chains (GVCs) have been a feature of the international economic architecture for many years, but scholarly interest in the phenomenon is more recent. Today that interest is intense, emanating from an array of academic disciplines as well as from the policy world. The literature that attempts to understand and explain GVCs is vast, multidisciplinary and no less complex than the phenomenon itself. This volume, jointly produced by the Fung Global Institute and the World Trade Organization, is an attempt to capture the core features and themes of the exploding literature on GVCs. Contents Part I. Supply Chain Perspectives 1. Supply chains in the economics literature 2. Supply chains in the business literature Part II. Supply Chain Issues 3. Supply chains and offshoring 4. Supply chains, upgrading and development 5. Supply chains and risk 6. Supply chains and SMEs 7. Supply chains and services 8. Supply chains and trade in value-added 9. Supply chains and business models 10. Supply chains and sustainability 11. Supply chains and trade policy 12. Supply chains and trade finance

A Literature Review

Supply Chain Perspectives and Issues

Technology and globalization are threatening manufacturing’s traditional ability to deliver both productivity and jobs at a large scale for unskilled workers. Concerns about widening inequality within and across countries are raising questions about whether interventions are needed and how effective they could be. Trouble in the Making? The Future of Manufacturing-Led Development addresses three questions: - How has the global manufacturing landscape changed and why does this matter for development opportunities? - How are emerging trends in technology and globalization likely to shape the feasibility and desirability of manufacturing-led development in the future? - If low wages are going to be less important in defining competitiveness, how can less industrialized countries make the most of new opportunities that shifting technologies and globalization patterns may bring? The book examines the impacts of new technologies (i.e., the Internet of Things, 3-D printing, and advanced robotics), rising international competition, and increased servicification on manufacturing productivity and employment. The aim is to inform policy choices for countries currently producing and for those seeking to enter new manufacturing markets. Increased polarization is a risk, but the book analyzes ways to go beyond focusing on potential disruptions to position workers, firms, and locations for new opportunities. www.worldbank.org/futureofmanufacturing

Gaurav Nayyar

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