Excellencies,Distinguished delegates,Ladies and Gentlemen,
Allow me to start by thanking Ambassador Chatardová for hosting this Luncheon and for inviting me to speak on this crucial topic.
Manufacturing is often described as an escalator toward prosperity. In developed countries, manufacturing jobs have provided better working conditions, better pay, and opportunities for advancement.
For developing countries, exports of manufacturing goods and integration into global supply chains are drivers of growth and job creation.
Manufacturing allows for rapid productivity growth and learning. It employs large numbers of unskilled workers. And manufacturing products are typically tradeable, so that demand is not limited by the size of countries’ domestic markets.
In short, manufacturing can rapidly shift a country’s resources from low- to high-productivity activities.
The experience in my own country, China, is one example of how manufacturing growth has allowed vast numbers of people to find productive employment, pulling them out of poverty.
Excellencies,
Both the disappearance of manufacturing jobs in rich countries, and threats to the export-led industrialization model, have become a source of great anxiety.
With the advent of the fourth industrial revolution, many developing countries run the risk of ‘premature deindustrialization.’ Rapid technological change could spur relocation of manufacturing activities closer to major consumer markets and centres of innovation, foreclosing export and growth opportunities for the developing world. Evidence of this phenomenon is limited so far, but challenges to the international trading system could exacerbate such a trend.
There is cause for concern. But there is no need for overt pessimism. Opportunities for productivity growth and decent jobs still exist, and there is plenty that policymakers can do to achieve them.
First, there is still space for governments to pursue structural transformation of their economies. Manufacturing’s desirable features – potential for productivity growth, tradability, labour intensity – are not exclusive to the sector. Policies can help ensure that workers’ skills are aligned with highly-productive sectors. A comprehensive approach can unlock productivity growth across the board, including by strengthening human capital and physical infrastructure, as well as improving the business and investment climate.
Secondly, we must turn our attention to finding ways for countries to achieve technological and productivity catch-up, and to provide large-scale employment opportunities. The challenge for the international community is to facilitate wide diffusion of technology and innovation, allowing developing countries to ‘leap-frog’ technological advances in support of progress on the SDGs.
We also must think harder about ensuring decent work for all, guaranteeing social protection, and leaving no one behind.
Third, structural change was always only one, albeit a critical, element of growth strategies. Where successful, such strategies were accompanied by broader growth-oriented macroeconomic policies, and supported by an international enabling environment. These remain valid and important priorities, which we will discuss throughout this week in the Financing for Development Forum.
I am sure our discussions today and for the rest of the week will bring us closer to achieving tangible progress in these areas.
Thank you.
Allow me to start by thanking Ambassador Chatardová for hosting this Luncheon and for inviting me to speak on this crucial topic.
Manufacturing is often described as an escalator toward prosperity. In developed countries, manufacturing jobs have provided better working conditions, better pay, and opportunities for advancement.
For developing countries, exports of manufacturing goods and integration into global supply chains are drivers of growth and job creation.
Manufacturing allows for rapid productivity growth and learning. It employs large numbers of unskilled workers. And manufacturing products are typically tradeable, so that demand is not limited by the size of countries’ domestic markets.
In short, manufacturing can rapidly shift a country’s resources from low- to high-productivity activities.
The experience in my own country, China, is one example of how manufacturing growth has allowed vast numbers of people to find productive employment, pulling them out of poverty.
Excellencies,
Both the disappearance of manufacturing jobs in rich countries, and threats to the export-led industrialization model, have become a source of great anxiety.
With the advent of the fourth industrial revolution, many developing countries run the risk of ‘premature deindustrialization.’ Rapid technological change could spur relocation of manufacturing activities closer to major consumer markets and centres of innovation, foreclosing export and growth opportunities for the developing world. Evidence of this phenomenon is limited so far, but challenges to the international trading system could exacerbate such a trend.
There is cause for concern. But there is no need for overt pessimism. Opportunities for productivity growth and decent jobs still exist, and there is plenty that policymakers can do to achieve them.
First, there is still space for governments to pursue structural transformation of their economies. Manufacturing’s desirable features – potential for productivity growth, tradability, labour intensity – are not exclusive to the sector. Policies can help ensure that workers’ skills are aligned with highly-productive sectors. A comprehensive approach can unlock productivity growth across the board, including by strengthening human capital and physical infrastructure, as well as improving the business and investment climate.
Secondly, we must turn our attention to finding ways for countries to achieve technological and productivity catch-up, and to provide large-scale employment opportunities. The challenge for the international community is to facilitate wide diffusion of technology and innovation, allowing developing countries to ‘leap-frog’ technological advances in support of progress on the SDGs.
We also must think harder about ensuring decent work for all, guaranteeing social protection, and leaving no one behind.
Third, structural change was always only one, albeit a critical, element of growth strategies. Where successful, such strategies were accompanied by broader growth-oriented macroeconomic policies, and supported by an international enabling environment. These remain valid and important priorities, which we will discuss throughout this week in the Financing for Development Forum.
I am sure our discussions today and for the rest of the week will bring us closer to achieving tangible progress in these areas.
Thank you.
File date:
Tuesday, April 24, 2018