Manufacturing: Facts, Tends and Implications

Abstract

This paper articulates why manufacturing, and specifically advanced manufacturing, forms the basis for national prosperity. It also discusses the future developments of key technologies that will impact both manufacturing and service activities and their mpact on both firms and society in terms of productivity improvements, skills and jobs, organizational forms and global dispersion and concentration of value creating activities. It concludes that in countries with a high economic complexity the technology-enabled developments will have a positive effect on national prosperity as long as a sensible and predictable policy environment is created and maintained, especially in relation to the development of a sufficiently large and relevantly skilled labour pool. For countries with a low economic complexity, it concludes that the outlook is more challenging and unless a policy to rapidly increase the economic complexity is successfully pursued the overarching outcome is likely to be one of reduced national prosperity further negatively impacted by high levels of unemployment of individuals with a skill mismatch as compared to the low and reducing remaining demand for labour.