Is There A Future For Manufacturing-Led Development?

Countries, and especially lower-income countries, have traditionally relied on manufacturing and the export of these manufactured goods, as a central driver of economic development, as it provides jobs for unskilled workers, which can relatively easy be transferred from lower productive (agricultural) jobs to higher productive (industrial) jobs, hence increase productivity, and drive economic growth, increasing profits and delivering the (fiscal) dividends necessary for further investments and development. But success in manufacturing and its integration in the global economy, e.g. through joining global value chains, is very concentrated in Western countries, and lately China, leaving other countries with potentially less options. In addition there are other new realities and threats to Manufacturing-Led development, also due to improving and often disruptive technologies, which will change location decisions, and reduce the amount of jobs even if factories are opened in lower-income countries. In this article we will discuss what disruptions and threats may reduce the attractiveness of Manufacturing-Led development; which technologies might change the attractiveness of Manufacturing-Led development; what might be their impact; what opportunities remain, including Service-Led development; and what can be done to grab these opportunities.