Trouble in the Making? The Future of Manufacturing-Led Development

Throughout history, lower-income countries have relied on manufacturing, which provides jobs for unskilled workers, helps increase productivity, and drives economic growth, as a central driver of development. However, success in manufacturing and global value chains is currently concentrated in a limited number of countries. In 2015, 55% of the world’s manufactured goods were produced in high-income countries. China, the world’s largest producer, accounted for another 25%. Where does this leave other countries? A new report from the World Bank Group’s Trade & Competitiveness Global Practice, Trouble in the Making? The Future of Manufacturing-Led Development, explains that the criteria for becoming a desirable manufacturing location are changing. Companies once influenced by the prospect of inexpensive labor costs are beginning to favor locations that can better take advantage of new technologies.