Manufacturing-led development in the digital age: how power trumps technology

Abstract

In this article, I analyse challenges to manufacturing-led development in the Global South in the context of digitalisation. I look at three phenomena in particular: (1) the rise of digital services as an alternative to manufacturing in achieving economic development; (2) the impact of digital automation technologies on job creation in the manufacturing sector; (3) manufacturing-led development in the context of digital and global value chains. I make two important arguments. The first argument is that the rise of digital services or digital automation technologies do not require a serious reformulation of manufacturing-led development strategies. The second argument is that the expansion of digital and global value chains are empowering transnational corporations headquartered in the North at the expense of industrialisation in the South. Industrial policy and international politics can play a part in mitigating the challenge underscored by my second argument. At the national level, the establishment of state-owned enterprises is a good alternative to development strategies that rely purely on linking up to transnational corporations. At the international level, we need change within organisations that enforce rules of trade in favour of the North, and we need to support agreements and initiatives established by and for the South.