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101. Testing the Smile Curve: Functional Specialisation in GVCs and Value Creation

Author:
Roman Stöllinger
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
According to the ‘smile curve hypothesis’ the potential for generating value added varies significantly across the various functions along a firm’s value chain. It suggests in particular that the production stage is the least promising value chain function in the entire manufacturing process. This logic implies that countries specialising as ‘factory economies’ are likely to generate comparatively little value added. To shed light on the relationship between functional specialisation along the value chain and value creation, this paper develops measures for functional specialisation derived from project-level data on greenfield FDI for a global sample of countries. These measures keep the industry and the functional dimension of specialisation strictly apart. They are used to test econometrically the negative relationship between value added creation and functional specialisation in production as predicted by the smile curve hypothesis.
Topic:
International Trade and Finance, European Union, Economy, NAFTA, Manufacturing, and Global Value Chains
Political Geography:
Europe and East Asia

102. Manufacturers and Security Providers: A Conceptual Essay

Author:
Silviu Petre and Ella Ciuperca
Publication Date:
08-2019
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
This article aims to contribute to the theoretical clarification of certain widely used terms in scholarly literature as well as in public statements made by policymakers, pundits, media people but insufficiently exaplained, namely security producers and security consumers. Although frequently present, neither political science nor international relations literature have grappled with them, therefore rendering scholars incapable to grasp the complexity of inter-state position.
Topic:
Security, Science and Technology, Manufacturing, and Industry
Political Geography:
Global Focus

103. China's Global Power and Development: The Made in China 2025 Policy

Author:
Diego Pautasso
Publication Date:
08-2019
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
The purpose of this article is to analyze the relationship between development and global power of China. And, more specifically, how the Made in China 2025 policy is designed to deepen China’s development by driving strategic sectors of smart manufacturing and other innovations. To do so, it needs to understand how China has taken advantage of systemic changes since the 1970s to unleash a cycle of comprehensive reforms mobilizing industrial, commercial and technological (ICT) policies. That is, without state emulation there is no economic complexity or expansion of the country’s presence in the world. The proposed argument is that the interweaving between the internal and international dimensions compose the key of the rise of the powers - imperative underestimated by the narratives of liberal globalization - whose epicenter remains the national development.
Topic:
Development, Globalization, Science and Technology, Hegemony, Manufacturing, and Industrialization
Political Geography:
China and Asia

104. Harnessing the Demographic Dividend to Fast-Track Industrialisation: A Case in the ICT sector

Author:
Tengetile G. Hlophe and Thula Dlamini
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Eswatini Economic Policy Analysis and Research Centre (ESEPARC)
Abstract:
Eswatini ranks very low in the Global Competitiveness Index (GCI). Conceivably, this draws from the fact that Eswatini is a consumer of goods and services produced from outside the economy. In this paper, we use data from the GCI, International Telecommunications Union (ITU), and Global Innovation Index (GII) to argue that Eswatini should focus its industrial policy towards the creation of tacit productive capacities amongst SMEs in the manufacturing sector to drive large-scale industrialisation. The paper shows that by doing this, Eswatini will position herself to be a leader in the manufacture of industrial goods in the region and in the long-term be able to attract foreign investors to the country. In particular, the study analyses panel data of 5 African countries to illustrate that manufacturing in the ICT sector could contribute to increased economic growth, particularly if targeted towards technologies that are in high demand among the youth- such as smartphones, laptops, and other similar gadgets. The paper juxtaposes its main treatise with Africa’s youth bulge and shows that with every 1% increase in the youth population there will be a 4.79% increase in the adoption and usage of ICTs by the youth. This suggests that there is an opportunity for the country to anchor its industrial policy on the production of those technologies that are in high demand amongst the youth. The key message in the paper is that building tacit knowledge and skills in the manufacturing of high technology products could reduce youth unemployment, attract foreign investments, and create opportunities for industrial development and industrialisation. The paper concludes with some considerations for industrial policy in Eswatini.
Topic:
Demographics, Development, Manufacturing, Industrialization, and Industry
Political Geography:
Africa and Eswatini

105. Long-Run Performance of the Organised Manufacturing Sector in India: Aggregate Trends and Industry-level Variation

Author:
Amay Narayan and Amit Basole
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
Despite its weak performance in terms of job creation in recent years, the organised manufacture sector remains vital to employment policy. This paper investigates the aggregate trends in this sector, in employment, output, labour-capital ratio, as well as wage share and wage rates at the three-digit NIC level over a long period from 1983 to 2016 using the Annual Survey of Industries data. We show that three distinct sub-periods can be identified within the overall period. Further, using shift-share decomposition we show that most of the decline in the L/K ratio can be explained by within industry changes. Finally, we analyse industries with respect to their capacity to deliver job growth as well as wage growth.
Topic:
Economics, Employment, Economic Growth, and Manufacturing
Political Geography:
India

106. Pride and Prejudice: The Condition of Handloom Weavers in West Bengal

Author:
Rajesh Bhattacharya and Sarmishtha Sen
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
In India, the relative importance of the handloom sector, one of the largest employers following agriculture, has been declining for last few decades. The All India Handloom Census data for the year 2009-10 however showed a rather modest decline in the number of weavers in West Bengal, in contrast to a 33% decline at the national level in the same year. But share of handloom income in total household income for the weaver households in the state has decreased significantly pointing to considerable occupational diversification among them. Based on a qualitative field study in three districts of West Bengal—namely, Hooghly, Nadia and Purba Bardhaman—this essay presents findings related to the condition of handloom weavers in West Bengal and in the light of the findings, examines two issues— intra-sector and inter-sector mobility of labour as well as weavers’ response to changing market conditions. The paper argues for a more labour-focused approach in place of currently dominant tradition-focused understanding of the sector.
Topic:
Labor Issues, Employment, and Manufacturing
Political Geography:
India and West Bengal

107. Labour Absorption in Indian Manufacturing: The Case of the Garment Industry

Author:
Chinju Johny and Jayan Jose Thomas
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
A striking feature of the Indian economy has been the relatively small contribution made by the manufacturing sector to the country’s Gross Domestic Product (GDP) and, more importantly, to employment. In 2013, manufacturing accounted for only 16.5 per cent of India’s GDP, compared to 29.7 per cent of China’s.3 According to the National Sample Survey (NSS) on Employment and Unemployment, India’s manufacturing sector provided employment to 61.3 million in 2011-12, which was only 13 per cent of the country’s total workforce of 472.5 million in that year (Thomas 2015a).
Topic:
Economics, Labor Issues, GDP, Employment, and Manufacturing
Political Geography:
India

108. The Significance of the Tobacco Product Manufacturing to Poland’s Economy

Author:
Grzegorz Poniatowski and Krzysztof Głowacki
Publication Date:
01-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report, The Significance of the Tobacco Product Manufacturing to Poland’s Economy, presents the results of the first comprehensive analysis of the impact of tobacco product manufacturing on the Polish economy. The comprehensiveness of the study results from the subject range, covering the sector’s entire value chain: from tobacco cultivation, through processing of raw tobacco and manufacturing of tobacco products, to the distribution and sale of ready products. The report includes an in-depth analysis of current conditions, discusses the challenges facing the sector and attempts to estimate the development of the branches of the economy related to manufacturing of tobacco products in the future. The main purpose of this research was to analyze the economic significance of manufacturing of tobacco products. The economic effect of consumption of tobacco products was only a peripheral element of the research. Conducting such complex research was made possible by advanced methodology. The analytical work was built on three pillars: analysis of existing data, expert interviews and a computable general equilibrium (CGE) model expanded to include production and consumption of tobacco products.
Topic:
Economics, Commodities, Fiscal Policy, Manufacturing, and Tobacco
Political Geography:
Europe and Poland

109. The Chicago Merchandise Mart: How the World’s Largest Commercial Building Fueled an American Political Dynasty

Author:
Kevin M. Higgins, Oenone Kubie, Courtney Bruno, and Christopher McKenna
Publication Date:
09-2018
Content Type:
Case Study
Institution:
Oxford Centre for Global History
Abstract:
Spanning 4.2 million square feet, two city blocks, and rising twenty-five stories high, the Merchandise Mart – the largest commercial building in the world – stands on the northern bank of the Chicago River. From the merchandising Hall of Fame in front of the Mart, one can watch passing architectural tours admiring the impressive Art Deco exterior of the building. These days, the Mart is home to high-end designers, advertising firms, and, increasingly, tech companies and start-up incubators. Within its vast interior, the industries of the Third Industrial Revolution have taken hold. Yet, when the Mart opened on 5 May 1930, no economic revolution was already established. By the early 1900s, the Second Industrial Revolution had brought assembly lines to factories, and the disassembly line to Chicago’s slaughterhouses, and it had seen electrification, telegraphs, and the railroads span the North American continent. But the revolution was already slowing by the third decade of the twentieth century. What had revolutionised industry in the nineteenth century now served as commonplace and not until well after the Second World War would Americans feel the first stirrings of another revolution as computation, telecommunications, and genetics again transformed the economy.
Topic:
International Trade and Finance, Capitalism, Commodities, Manufacturing, and Economic Development
Political Geography:
United States and Chicago

110. Of “Missing Middle” and Size-based Regulation

Author:
R. Nagaraj
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
Preponderance of small (that is, less than 10 workers) sized manufacturing establishments in India is said to re&ect their inability to growth in size on account of prohibitive cost of regulatory compliance (and the associated corruption). Similarly, the “U” shaped (or bi-modal) distribution of manufacturing employment by size of establishment or enterprise – popularly termed the “missing middle” – is argued to be the outcome of the rigid labour laws, adversely a/ecting productivity growth. Do the foregoing propositions represent hard facts, or artefacts of mis-measurement and misinterpretation of the evidence? The paper contends that it is the latter: the observed employment distribution by size is more likely to re&ect the widespread and growing evasion of o3cial registration, and under-reporting or mis-representation in the administrative data. Further, the wide schism observed between the organised (formal) and unorganised (informal) labour markets represents persistence of surplus labour, and organisational dualism – a la Hella Myint - on account of technology and organisation of production in the modern sector; and perhaps not on account of policy induced rigidities in the labour market, as many contend.
Topic:
Corruption, Employment, Regulation, Manufacturing, and Labor Market
Political Geography:
South Asia and India