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This chapter analyses the impact of trade on employment in the informal sector of India’s manufacturing sectors. The analysis is based on data for the year 2005–6, for as large a number as 81,000 enterprises at the 3-digit level of industrial classification, covering 66 industries across 25 states. One of the main findings of the chapter is that forward and backward linkages between the organized and unorganized manufacturing sectors do exist, but these are prominent mostly in the states where the export orientation of industry is considerable. Also, the favourable employment-generating effects of trade are much more significant in the case of relatively large enterprises employing more than six workers. The chapter also suggests that increased imports in the post-liberalization era may have destroyed jobs in the manufacturing sector. It concludes with suggestions for promoting employment in the manufacturing sector.

This is the second of three chapters on the sources of pressure on contemporary national welfare states, all of which seek to show how examining the sources of strain carries implications for identifying who is likely to fight with whom over what; the authors of the three chapters are not of one mind on this issue. Iversen's analysis seeks to show that de‐industrialization—caused by the dramatic increases in productivity in the manufacturing sector rather than by globalization—is the crucial motor of social change. He directly challenges a variant of the globalization thesis that has been popular among scholars: the idea that exposure to the heightened labour market risks of an open economy fuelled the expansion of the welfare state as a form of compensation. Instead, he marshals considerable evidence for the view that it is the shrinkage of the manufacturing sector, and not economic (trade) openness, that fuelled the growth of compensatory social policy. He finds little evidence in favour of the view that the various dimensions of globalization constitute a source of real threat to the contemporary welfare state.

This is the third of three chapters on the sources of pressure on contemporary national welfare states, all of which seek to show how examining the sources of strain carries implications for identifying who is likely to fight with whom over what; the authors of the three chapters are not of one mind on this issue. Here, Pierson focuses on trends within affluent democracies that constitute potential sources of the strains usually attributed to globalization. Like Iversen in the previous chapter, he highlights the role of the shift from manufacturing to services, but rather than focusing on the disruption of employment, his concern is the shift in the workforce to activities where productivity improvements are more limited; the result has been slower economic growth, which generates fiscal strain for mature welfare states. This, for Pierson, is one of a series of ‘post‐industrial shifts’ that produce severe pressures on the welfare state — others include the maturation of governmental commitments, the transformation of household structures, and population ageing. All these shifts create intense fiscal problems; in addition, social change in a context where programmes are often slow to adapt generates mismatches between the inherited capacities of welfare states and contemporary demands for social provision.

Aims to provide a descriptive–analytic overview of the record of Philippine industrialization, with special reference to the period since 1980. It also identifies some of the factors that have retarded efficient industrial growth and examines various key industrial policy debates and challenges. It first presents the basic trends in output, employment, and productivity, followed by an examination of broad structural changes within industry, and of export performance. It further investigates aspects of industrial structure and intervention including ownership and concentration, the size distribution of small‐ and medium‐sized enterprises, spatial patterns, and import protection. The chapter notes that, according to almost all the above criteria and with just a few exceptions, manufacturing has performed poorly for most of the past two decades. It concludes with a forward‐looking assessment of major policy challenges regarding the incentive regime, innovation and diffusion issues, and constraints to industrial growth.

China's undervalued exchange rate has affected the world economy in numerous ways and is among the most contentious issues in contemporary international politics. This chapter examines whether the conditional preference theory helps explain exchange rate politics in China between 1993 and 2009. It begins with an overview of China's political and economic system, describing the organization of the labor and financial system and the power of the manufacturing sector. It then examines how politics shaped exchange rate policy in China between 1993 and 2009. The third section summarizes key findings and explains how they shed light on the relationship between domestic politics and undervalued exchange rates more broadly. It is shows that lobbying by the powerful manufacturing sector is a major reason why China kept its exchange rate undervalued for most of the 1993–2009 period.

This chapter considers the National Association of Manufacturers' (NAM) revival in the 1990s. Indeed, NAM celebrated its one-hundredth anniversary in 1995 amid vastly improved conditions. Blasting premature claims about manufacturing's death, NAM president Jerry Jasinowski declared that American industry was back on track. Manufacturing had transformed itself to meet the global future. Granted, it did so through downsizing, automating, and relocating production abroad. But, Jasinowski insisted, it was still a generator of jobs—better jobs, smarter jobs, and jobs in which workers' input and empowerment were crucial to success. Like past NAM leaders, Jasinowski placed enormous importance on “getting out the story,” but the story was no longer about “free enterprise.” It was about the manufacturing sector's contribution to economic growth and global competitiveness.

The economic crisis in Zimbabwe affected the performance of the manufacturing sector. This chapter focuses on the causal factors for the firms’ challenges, survival strategies adopted by companies, evaluates the policy strategies imposed by the government as mitigating measures as well as use the experience to recommend policy and practice changes needed to effectively ensure that the sector can be shielded from similar crises in future. Management response to the crisis was central in deciding whether manufacturing companies could survive hyperinflation. Survival strategies included decentralization of decision making, changing product lines, compromising quality and vertical integration to ensure easy access to raw materials. Unlike other countries that also experienced similar challenges, Zimbabwe’s policies that limited ability to withdraw money from banks and controlled price had negative effects on the manufacturing sector. Instead, the policy options adopted by government were responsible for worsening manufacturing sector woes during hyperinflation.

Hong Kong's economy has experienced rapid structural changes over the past three decades. The service sector grew speedily in terms of its share in employment, nominal GDP and real GDP, while the manufacturing sector shrank significantly. Such a rapid structural change can be attributed to the relocation of manufacturing industries to the Pearl River Delta. Ostensibly, the expansion of manufacturing production in mainland China gives rise to an enormous demand for all sorts of supporting services in Hong Kong. This chapter examines the growing service sector in the territory. It explores the changes in labour productivity over time, the rise of intermediate production services and the government's role in a service economy.

This chapter examines the welfare implications of changing wage and employment situations in the informal sector by constructing a comprehensive model. The structure involves an agricultural sector and incorporates several allied issues central to the considerably neglected analytical relationship between agriculture and informal activities. It is well known that better prospects for agricultural exports and productivity should increase agricultural wages. However, such an outcome depends on capital movement between the formal and informal manufacturing sectors. The inter-relationship sought between the agricultural and manufacturing sectors offers added value to a general set of results that focus on effects of external shocks to movements in informal wages and employment.

This chapter introduces the key themes of the book—the presence of a dual manufacturing economy, the presence of a large informal manufacturing sector that exists despite economic growth, and the constraints to the transition of the informal sector firms to the formal manufacturing sector—by presenting some stylized facts on the informal economy and also relate these topics to the wider literature on the informal economy. It presents an overview of the various chapters of the volume which view the informal sector through a production ‘lens’ in order to understand the factors behind urban poverty.

This chapter seeks to synthesize and extend the emerging literature on the connection between micro- and aggregate productivity growth dynamics. It focuses primarily on the empirical findings and shows that the measured quantitative contribution of reallocation to aggregate productivity growth varies significantly across studies. The objective is to understand the sources of the differences in results across studies. It pursues this objective in two ways. First, it compares the results carefully across studies, taking note of differences on a variety of dimensions including country, sectoral coverage, time period, frequency, and measurement methodology. Second, it exploits establishment-level data for the U.S. manufacturing sector as well as for a few selected service sector industries to conduct an independent investigation of the relevant issues. A commentary is also included at the end of the chapter.

This chapter concerns the Industrial Revolution. The Industrial Revolution involved the transformation of organic economies by means of a complex of changes which gave birth to the modern world. In Europe, East Asia, and elsewhere those economies were agricultural. Thus the chapter discusses the replacement of an economy 80 per cent of the output of which might have been agricultural by another in which manufacturing became the dominant sector. This involved a transition in the scale of manufacturing from artisanal to large-scale workshop and then factory production. In Britain, that entailed technological innovation, but it would not have been possible in the first place without prior sustained changes in the rest of the economy and society.

This chapter investigates the changing international trade patterns and their effect on factor intensities in Japan, mainly focusing on the manufacturing sector. The factor content analysis showed that Japan's factor content net exports of capital and nonproduction labor have grown rapidly, while net exports of production workers have fallen by a large amount. The findings also indicate that specialization in the export of skilled labor-intensive products may have partly contributed to the increase in the relative demand for skilled labor within industry.

Chapter 6 assesses China’s catching-up and leapfrogging in key manufacturing sectors compared with the Korean experience. It explains the varying records of market catch-up by referring to diverse aspects of technological and market regimes, such as modularity, degrees of embodied technical change, tacitness of knowledge, knowledge accessibility, and frequency of innovations. Easy access to foreign technologies from developed countries (mobile phones vs. semiconductors), high degree of modularity (mobile phones vs. automobiles and semiconductors), and frequent changes in the generations of technologies or short cycle times of technologies (mobile phones and telecommunications systems vs. automobiles) generally help latecomers catch up. More importantly, sectors with a high degree of tacit knowledge (e.g., automobiles) tend to show a slower speed of catch-up than the manufacturers of telecommunications equipment with a high degree of explicit knowledge. Whether markets feature segmentation (or the existence of low-end niche segments for Chinese latecomers) seems to play an important role in the market regimes. Chinese firms manage to achieve initial success from a low-end market in segmented market conditions (e.g., telecommunications equipment and mobile phones) or markets protected by the government (e.g., telecommunications equipment). Conversely, they face high entry barriers in markets with no such segmentation (e.g., memory chips), which is one of the reasons for their slow progress in the memory chip sector (see also Chapter 4). These cases also suggest that technological regimes are not the only paramount determining factor; the outcomes are affected by the roles of actors, including firms and governments.

Productivity measurement has long been an important activity of the U.S. Bureau of Labor Statistics (BLS). This program has evolved over the years, stimulated by changes in data availability, by new developments in the economics literature, and by the needs of data users. This chapter discusses the current status of the BLS program, with emphasis on the data development work done in recent years. It first reviews the status of the BLS program as of the mid-1970s as well as some important advances in the economics literature that had occurred by that time. It then describes the development of multifactor productivity measures for the private business and private nonfarm business sectors—these were first published in 1983—and recent work to expand and improve these measures. It also describes recent extensions and improvements to measures for the manufacturing sector and for more detailed industries both within and outside manufacturing. Finally, it comments on the potential for further improvements in the measures.