So, the argument goes, the rest of the economy, stodgy, unreliable, or confined to the home market, cannot grow unless pulled by the manufacturing sector. But neither of the critical assumptions holds up nowadays, if they ever did. Countries have shown that they can find many avenues to achieve scale on world markets, of which manufacturing is one, and, with the exception of some services that must still be provided face-to-face, rapid productivity improvements are being achieved in all sectors of the economy, often faster than in manufacturing. As I argue in Dadush (2015), this is cause for hope, not despair.<\/p>\n
ICT (Information and Communications Technology) has created large new growth and high-productivity sectors in \u2018modern\u2019 services \u2013 such as finance, telecommunications, software, and business process outsourcing \u2013 and also made many services, previously provided face-to-face, such as retailing and banking, storable, divisible and tradable, boosting productivity. Exports of modern services have outpaced those of manufactures by a wide margin since 2000.<\/p>\n
Globalisation, ICT, and the associated phenomenon of rapid catch-up growth of developing countries, have opened up many new avenues for earning foreign exchange, boosted the demand and supply of natural resources, and created opportunities in finer combinations of resources, services, and manufactures (\u2018tasks\u2019) along the international value chain. Many economies that are poor in natural resources and too small or distant to be competitive in manufacturing have found that they can rely on migrant remittances, tourism, and investment links with their diaspora for foreign exchange and growth.\u00a0 Is <\/a>Manufacturing Necessary for Developing Nations<\/a><\/strong><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Uri Dadush writes: Manufacturing is often seen as the key to sustainable export and productivity growth in developing countries. This column argues that, while manufacturing played a key role in some countries\u2019 development, high growth can be sustained without relying … Continue reading ![\"Manufacturing](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/04\/Manufacturing-in-Africa.jpg\")
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