Advances in technology and changing trade patterns are highly affecting export-led Manufacturing, says World Bank report.
The report dubbed Trouble in the Making? The Future of Manufacturing-led Development highlights the changes in the manufacturing sector’s ability to create jobs and lift people out of poverty in developing countries.
This the report says is due to Smart Automation, Advanced Robotics and 3D printing, which now influences the choice of attractive production areas.
According to Anabel Gonzalez, World Bank Group’s Senior Director for Trade & Competitiveness Technology and globalization are changing how manufacturing contributes to development. We all will need to embrace this change rather than fear it.
The report notes that while these trends raise fears of less growth to low and middle income countries, the report identified policy priority areas that can help affected economies embrace opportunities that come along.
The report urges affected economies to embrace the recommended “3Cs” to build their manufacturing sector.
Below are the recommended 3Cs:
- Ensuring competitiveness will increase the importance of reforms that reduce unit-labor costs. But it will also require each economy to be better able to consider new business models; to seek new contracting relationships that embrace new technologies; and to devise new ways for manufactured goods to also deliver services.
- Building capabilities will involve giving workers new sets of skills, strengthening firms’ abilities to absorb new technologies, and providing new infrastructure and new rules to support the use of new technologies.
- Promoting connectedness will continue to emphasize openness to trade in goods, including raw materials and components. But it also increases the importance of grasping the synergies with services that are increasingly embodied and embedded within manufactured goods.