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Advanced manufacturing may change the rules of economic development

By Dan Steinbock
0 Comment(s)Print E-mail Shanghai Daily, May 13, 2016
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Different paths of economic development

In the process, the historical paths of economic development will be disrupted. Since the 18th and 19th centuries, Britain’s industrial revolution has provided the roadmap for economic development; first in continental Europe and America; later in Japan and Russia; and more recently in China and India.

In China, advanced manufacturing can help to fill the impending labor gap, which stems from aging population, the old one-child policy and rising wages. In other emerging and developing economies, it will force a rethink.

Unlike the preceding industrializers, these economies in the Middle East, Asia, Africa and Americas may no longer be able to enjoy the full benefit from moving agricultural workers into low-cost factories. Nor can they depend on export-led growth in an era when advanced economies’ structural stagnation translates to weak demand.

On the one hand, China’s increasing labor costs are manna from heaven to aspiring emerging economies – from Bangladesh and Sri Lanka in South Asia to IndonesiRoboa, Philippines and Myanmar in Southeast Asia– which hope to follow in the industrializers’ footprints. On the other hand, the rise of advanced manufacturing will make it more challenging for them to use manufacturing jobs for catch-up growth.

In this view, advanced manufacturing in general and robotics in particular are not just another emerging industry. Rather, they will accelerate efforts at greater innovation and enhanced human capital across the world. In the process, they are likely to change the rules of economic development.

The author is a columnist with China.org.cn. For more information please visit:http://m.keyanhelp.cn/opinion/DanSteinbock.htm

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