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2013 | Buch

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Industrial Shift: The Structure of the New World Economy

verfasst von: Joe Atikian

Verlag: Palgrave Macmillan US

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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This unique macro level analysis of the world's industrial structure reveals that ongoing advances in agriculture and manufacturing underpin the majority of growing economies.

Inhaltsverzeichnis

Frontmatter

1. Introduction

Abstract

Are food and goods “no longer made here”? Increased trade makes it seem so: India 1960s, Japan 1970s, China 1980s, Russia 1990s. Globalization and employment shifts bring fear of Western decline. The shift from farms to factories reinforces the fear, although economic data showing their growth seem to be ignored. The service sector grows much quicker and gives the illusion of decline in the other sectors.

The most advanced economies have the smallest share of GDP in agriculture, even while they grow ever more food. They also have the highest incomes.

Countries with less advanced technologies grow by shifting to manufacturing. Wealth grows slowly at first, but increases rapidly as they shift further from agriculture. The same pattern takes place in most countries around the world.

Joe Atikian

2. What Is Industrial Structure?

Abstract

The term “industrial structure” can be used in a few ways. This chapter lays out a straightforward description of the term as a classification of the three main economic activities: the agricultural, manufacturing, and services sectors. A pivotal concept is defined: the share of each sector in GDP. As the services sector grows, the other sectors appear to shrink. This shift is, of course, merely in the relative size of each sector, and not necessarily a decline in real output.

Through this discussion, it becomes apparent that the supposed decline in manufacturing is partly a mere artifact of the data reporting system. This helps to plant the idea that the popular image of decline does not accurately reflect the working economy.

Joe Atikian

3. The Global Status Quo

Abstract

The global economy is divided into the familiar 5% agriculture, 25% manufacturing, and 70% services. The highest agricultural share is in the tropics, with a lower share in wealthier countries. The wealth of nations can be predicted by a low farm sector share.

Manufacturing and services have reversed their relation to wealth. Major advances in technology have made services tradable, and now a higher share in services characterizes advanced economies.

Joe Atikian

4. Speeding Up, Slowing Down

Abstract

Progress is steady and gradual as the agricultural and services sectors switch ranks. Global manufacturing holds its share steady except during the Soviet collapse.

The rate of change in agriculture correlates to changes in wealth, but predicting future trends based on historic data proves questionable. In a complete reversal from past decades, a falling manufacturing share correlates with rising wealth; the cause is rising productivity. Developing countries can benefit from shifting to manufacturing while advanced countries can benefit by shifting to services. A chart of structural shift can be used as an indicator of political stability. Similarities are revealed between the path of mature industrial economies and today’s rising stars. China’s current path bears a remarkable resemblance to that of Sweden’s of a century ago.

Joe Atikian

5. Power Shift: East and West

Abstract

Most countries including China are losing agricultural share in GDP, even as food production grows faster than population. The global manufacturing share has held steady over recent decades, but it has declined in Western countries and risen in Eastern countries. China is, of course, a large part of the story, but so too is Japan’s stagnation, Korea’s rise, and Europe’s drop in the ranks. The global pie has grown and so has the Eastern share, while the decline of Western manufacturing is greatly exaggerated.

Tradable services constitute the current revolution in the global industrial shift.

Joe Atikian

6. Power Shift: North and South

Abstract

The Caribbean shows that rapid industrial shifts into services can produce rapid economic growth. Africa and Latin America remain a perennial concern with respect to development. They also remain a very small and virtually unchanging proportion of the world economy. Brazil’s outstanding growth is the main exception to South American stagnation, even though its agricultural sector has surged in size and share. Pockets of growth are evident in Africa although new mining and oil industries bring little technological advancement. The majority of small, poor, stagnant economies still focus on agriculture, and they lie in Central Africa.

Climate issues are largely ignored by economists, although they are demonstrably important.

Joe Atikian

7. The Isolated Islands

Abstract

Small island nations offer the sort of natural experiment that economists prize. The Caribbean and Oceania are presumed to be subject to high prices and heavily reliant on trade. The structure of small island trading economies might be expected to increasingly resemble their closest and largest neighbors. Instead, they closely resemble countries with the deepest cultural connection. Their industrial structure is related to the Gravity Theory of trade.

A comparison of Cuba and Australia shows how totally different political systems do not distort the relation of agriculture to wealth.

Joe Atikian

8. Farms and Factories

Abstract

Productivity improvement through technological change is the key cause of industrial shifts. Farms have continually improved labor efficiency, leaving surplus labor to shift to manufacturing. Innovative factory products cycle back to the farm in an ongoing cycle. Cause and effect are permanently intertwined.

Agriculture has nearly vanished as a share of GDP, but its output always grows. Manufacturing has a moderate and stable share of GDP, but is unevenly distributed around the world.

Shifts from farm to factory to office are blamed for job losses. Trade with China is also blamed. These are only partly correct. China regained its most favored nation trade status and is now in an industrial revolution. It has added to global industrial output instead of absorbing it from the West.

Joe Atikian

9. Where the Jobs Are

Abstract

Industrial structure shifts along with labor productivity within an economy. But shifting geographic trade patterns also affect structure. In turn, both productivity and trade influence employment levels but not necessarily in the expected ways. Farm and factory output is rising in most countries. Canada’s factory jobs rise and fall mainly with the dollar exchange rate. Strong German exports do not reduce unemployment. Productivity is reducing factory jobs in China.

Some aspects of the US jobs crisis are disproved. Contrary to popular opinion, overall unemployment has improved as the trade deficit increased since the 1980s; service sector wages pay more and rise more than other sectors; production jobs and management jobs were equally affected by the recession.

Joe Atikian

Backmatter

Titel: Industrial Shift: The Structure of the New World Economy
verfasst von: Joe Atikian
Verlag: Palgrave Macmillan US
Electronic ISBN: 978-1-137-34031-3
Print ISBN: 978-1-349-46530-9
DOI: https://doi.org/10.1057/9781137340313

Springer Professional

Über dieses Buch

Inhaltsverzeichnis

Frontmatter

1. Introduction

2. What Is Industrial Structure?

3. The Global Status Quo

4. Speeding Up, Slowing Down

5. Power Shift: East and West

6. Power Shift: North and South

7. The Isolated Islands

8. Farms and Factories

9. Where the Jobs Are

Backmatter

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