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The fact that modern industry originated in Britain, and spread initially to Northwest Europe and North America, implied a dramatic divergence in living standards between the industrial ‘West’ and a non-industrial ‘Rest’. This industrial divergence is visibly unravelling today, as Third World economies converge industrially on the rich economies of Europe and North America. This phenomenon has been the subject of much research. Less appreciated, however, are the deep historical roots of this convergence, and in particular of the spread of modern industry to the global periphery. This chapter provides an introduction to the book, which fills this gap by providing a systematic, comparative, historical account of the spread of modern manufacturing beyond its traditional heartland to what we call the poor periphery. The chapter highlights the roles of factor endowments, the international context, luck, and economic policy in determining the timing and extent of manufacturing growth.

This chapter reviews the ‘long twentieth-century’ development of ‘modern’ manufacturing in Sub-Saharan Africa from colonization to the present. It argues that classifying Africa generically as a ‘late industrializer’ is inaccurate. To understand the distinctively African pattern of manufacturing growth, the discussion focuses on the dynamic interplay between the region’s specific endowment structures, global economic relationships, and government policies. It concludes that Sub-Saharan Africa is best characterized as a case of interrupted industrial growth instead of sustained convergence on world industrial leaders. This is partly because, until very recently, factor endowments made it very costly for states to pursue industrialization; and partly because successive rulers, colonial and post-colonial, have rarely had both the capacity to adopt and the dedication to sustain policies that modified the region’s existing comparative advantage in primary production, by using their fiscal and regulatory powers effectively to promote industrialization.

This chapter examines the industrial performance of Egypt and Turkey during four periods: 1870 to the First World War under open economy conditions; the inter-war era when industrialization began with the help of protection; the decades after the Second World War when the import-substituting industrialization model was adopted and rates of industrialization peaked; and trade liberalization since 1980. Per capita incomes were similar in Egypt and Turkey around 1870 but were 150 per cent higher in Turkey than in Egypt in 2010. The chapter identifies several factors which explain this divergence: land abundance in Turkey and its scarcity in Egypt; initial social structure and related political economy forces; government intervention; and the quality of related institutions. In terms of human capital investment, Turkey and Egypt lagged behind countries in Latin America and East Asia, which made it difficult for manufacturing to move towards sectors with higher technology and value added.

Indonesia, Malaysia, and Thailand emerged unexpectedly in the 1960s and 1970s as fast-growing, labour-intensive manufacturing countries. Their industrial growth rates closely matched those of Japan, South Korea, and Taiwan for more than two decades. This sudden export-led ‘miracle’ took place in the context of political instability and ethnic tensions, after more than two decades of modest success with post-independence, import-substituting industrialization strategies there and in other Southeast Asian nations. Cambodia and Vietnam joined the export-led manufacturing club in the 1990s, followed by Myanmar in the 2000s. The Philippines was the only Southeast Asian nation to miss the late twentieth-century ‘miracle’. Southeast Asia experienced some impressive GDP per capita growth between 1870 and 1940, but, outside of the Philippines, manufacturing stagnated and modern enterprises were confined to commodity export processing. The chapter analyses the region’s dismal industrial performance before the 1960s, and why manufacturing grew so fast in the following decades.

The industrialization experiences of Mexico and Peru differed because of their different market sizes and location. Mexico’s larger market and border with the US gave it greater opportunities for industrialization. Peru’s development is closer to that of the classic late-nineteenth-century commodity exporter and followed the primary-goods-exports model for longer. Until the 1980s both countries had relatively high wages, inhibiting the development of labour-intensive manufactured exports, but they lacked the education and skill levels to produce more technologically sophisticated manufacturing goods. Contrary to common belief, commodity export-led growth supported industrial growth as long as exports were diversified and the government pursued sound fiscal and monetary policies. Import substitution policies fostered manufacturing growth when coupled with macroeconomic stability and policies promoting domestic and foreign investment. After economic liberalization in recent decades, Peru returned to relying on commodity exports, while Mexico developed assembly export manufacturing, with very low levels of domestic value added.