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This paper examines the dynamics of deindustrialization in developed countries during the 1970–2015 period, investigating the patterns and factors underlying manufacturing employment growth in 12 developed economies. The study discloses seven key findings with valuable policy insights. In particular, the paper shows that deindustrialization is a persistent pattern that experienced a significant structural change in the post-1990 period, in which the acceleration of globalization with the rise of North-South trade appeared to have a significant effect. Furthermore, industries with higher relative labour productivity are significantly more resistant to deindustrialization, particularly in the post-1990 period, and this effect is stronger for low-tech industries. In addition, deindustrialization tends to be more severe in countries with larger populations and a deficit-prone trade balance, and these links have become more pronounced in the post-1990 period.

In the model of agricultural land use and rent of Von Thunen (1826), manufacturing decentralization is viewed as the refining (or “distilling”) of an agricultural commodity near the cultivation site, which substitutes for its transport to an industrial mill located in the Town. As Friedrich List (1841) added, this substitution is economically feasible only if the savings in transport cost following from in site refining cover the increase in fixed costs associated with a second industrial plant. We update this approach aiming to rationalize some stylized trends of manufacture relocation nowadays, which are jointly labeled as “deindustrialization info:eu-repo/semantics/publishedVersion

The purpose of the article is to consider the practical aspects of the structural transformation of economy. Over the past few decades, absolutely all national economies have undergone structural changes, regardless of their size, economic system and all other political or economic differences. The transformation of structures was associated with many factors, including institutional changes, technological changes, the widespread introduction of the results of scientific and technological progress, globalization and integration processes. At the same time, it should be noted that not all structural changes had a positive effect for all countries, even though the changes had almost the same trend of growth in the share of the service sector, a decrease in the share of agriculture and manufacturing. This article is an attempt to systematize the main trends and consequences of structural transformations in the world. The authors put forward the hypothesis that the world economy tends to “servicization” and deindustrialization, which has dialectical significance for the world economy. To assess the structural changes, we analyzed the data of the World Bank to study the dynamics of changes in the sectoral structure of the countries of the world in the period from 1990 to 2019. A very great influence on these processes was exerted by globalization, which through its mechanisms made possible a rapid change in industry proportions not only in the developed world, but also in developing countries, while forming a global trend of “servicization” of the economy. The authors tried to conduct a comparative analysis of the impact of each economic sector on GDP using a regression model based on panel data from more than 180 countries of the world presented by the World Bank.

The paper analyses the relation between premature deindustrialization in Latin America and what is termed premature financialization. Premature financialization is defined as a turn to finance, organized as an industrial concern, which is a vehicle for accumulation before the process of industrialization has reached maturity. This contrasts with developed countries where financialization occurs after an advanced stage of economic and social development has been reached, and where the growth of the financial sector, beyond a certain threshold, can be detrimental to economic activity. The paper examines the consequences of premature financialization for investment, growth, and financial stability.

The post-2008 era saw a return of the manufacturing fetish, the idea that manufacturing constitutes the flywheel of growth without which no nation can thrive. Across the Global North and South, voices are calling to reverse deindustrialization and revive manufacturing. While today deindustrialization is met with anxiety, in the 1930s economists predicted deindustrialization but interpreted it as a liberating process leading to a post-industrial age based on material abundance and widespread economic security. Far from delivering this vision, deindustrialization actually produces a precarious economic order driven by labour precarity, economic stagnation and lost development opportunities for the Global South. What can be termed the Baumolian and Kaldorian frameworks, attribute this precarious reality to services’ inability to replace manufacturing as a growth engine given their technologically stagnant nature. However, this article argues that, by focusing on the technical aspects of service economies, such views overlook the social limits of the capitalist economy and its historically specific conception of wealth, value. As capitalism matures, productivity becomes an increasingly inadequate form of augmenting social wealth as it results in great increases in physical output but counterintuitively undermines the expansion of value. Capitalism is underpinned by a secular movement towards declining dynamism, as it increasingly struggles to maintain its former economic vigour. Stagnation and heightened labour precarity are not merely the product of tertiarization but symptoms of capitalism’s declining trajectory.

The participation of manufacturing in the GVA of many advanced economies is continuously decreasing. The purpose of this work is to contribute to the dialogue around the drivers of such trend. In order to do so, we use input-output analysis for decomposing the variation in the manufacturing share as the sum of the effects of the variation of various possible drivers of deindustrialization: prices, domestic demand, technology and external trade; and we calculate these effects through a dynamic-hierarchical structural decomposition analysis. As a result of the analysis, we identify certain regularities: (a) variations in prices and domestic demand are the two most important factors explaining deindustrialization; (b) a process of substituting domestic production by imports also contributes to deindustrialization; (c) exports make a positive contribution to the participation of manufactures in the GVA but, after the 2008 crisis, this contribution does not offset the negative contribution of substitution by imports.

We add to recent evidence on deindustrialization and document a new pattern: increasing industry polarization over time. We assess whether these patterns can be explained by a dynamic open economy model of structural change in which the two primary driving forces are sector-biased productivity growth and sectoral trade integration. We calibrate the model to the same countries used to document our patterns. We find that sector-biased productivity growth is important for deindustrialization, and sectoral trade integration is important for industry polarization through specialization. The interaction of these two driving forces is also essential. The key transmission channel is the declining relative price of manufacturing goods to services over time.

Manufacturing’s share of employment is known to follow a hump-shaped pattern as economies structurally transform. Motivated by the observation that sectoral capital intensities evolve over time, this paper examines whether such changes are important in accounting for this pattern. It does this by putting forth a structural transformation theory that allows for time-varying capital intensities, heterogeneous TFP, Engel curves and trade. The model is calibrated to South Korea (1970–2010). Whereas traditional drivers matter for various elements of development, time-varying capital intensities are critical to account for the “push” out of manufacturing and for differences between employment and value added.

This paper investigates the dynamics of Mexico’s economy after the signing of the NAFTA treaty. It is reported that Mexico, the United States and Canada have experienced low rates of economic growth as a result of the deindustrialization processes they have undergone, which has been a consequence of the tariff reductions. Tariff reduction has also affected employment, especially female industrial employment, with adverse consequences on domestic savings, trade balance and economic growth. Additional analysis is related to cointegration tests of the employment ratios, as well as to the existence of principal components among the three countries’ employment to population ratios. The paper investigates the effects of declining employment to population ratios in the three countries, reporting that in Mexico female employment has increased to compensate the declining tendencies of labor productivity and male employment ratio. The paper ends with a proposal regarding the launching of the North American Social and Dignity Pact.