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

The World Bank,2017
Abstract : Globalization and new technologies are impacting the desirability and feasibility of what has historically been the most successful development strategy. Manufacturing has been seen as special, promising both productivity gains and job creation. But trade is slowing. Global value chains (GVC) are maturing. Robotics, artificial intelligence, 3D printing, and the Internet of things are shifting what makes locations attractive for production and threatening significant disruptions in employment. There is a risk of increased polarization, within countries and across countries. Shifting the attention from high-income countries, this report takes the perspective of developing countries to ask: — If new technologies reduce the importance of low-wage labor, how can developing countries compete? — Do countries need to industrialize to develop? — How can countries at different levels of development take advantage of new opportunities? Development strategies need to broaden. Different manufacturing sub-sectors can still provide productivity growth or jobs; fewer can deliver both. Many of the pro-development characteristics traditionally associated with manufacturing–tradability, scale, innovation, learning-by-doing–are increasingly features of services. With faster diffusion of technology, it will be all the more important for countries to improve the enabling environment, remain open to trade, and support capabilities of firms and workers to ensure future prosperity is shared.
Courtesy : World Bank Group

Human resource management and co-ordination for innovation activities – cases from India’s automotive industry

Sunil Mani
Asian Journal of Technology Innovation, 2017

ABSTRACT: The study undertakes the following three analytical issues in the process of technological capability building in firms in an industrialising country. First, it identifies the major innovative activity or learning events in the longitudinal history of a form in a technologically intensive industry. Second, it identifies the human resource requirement, which is required for achieving those learning events or innovations. Third, it maps out the internal and external human resource development strategies employed by the firms. The three issues are analysed in the context of three leading domestic firms in India’s automotive industry. The ensuing analysis shows some remarkable parallels in the internal and external strategies adopted by the three firms. The most dominant internal strategy is in-house training of scientists and engineers to do in-house R&D and the most dominant external strategy is the acquisition of technologically intensive foreign firms which possess a key technology which the original firm lacks and then effecting knowledge flows from the acquired foreign firm to the original domestic firm.

url – http://dx.doi.org/10.1080/19761597.2017.1385963
courtesy – T&F

A study on the dynamic comparison of logistics industry’s correlation effects in China

Shaohua Yi and Jie Xie
China Finance and Economic Review, 2017, 5:15

Entering the middle and late period of 1990s, the logistics industry has been keeping high-speed growth along with China’s continuously increasing economic level. As a basic and strategic industry, the logistics industry is closely linked with and influenced by other industries while influencing them. It plays an irreplaceable role in ensuring smooth operation of the national economy and satisfying the demand of consumers. Its development level directly affects that of the national economy.

With input-output tables from 1997 to 2010, the input-output model was used to measure the association effect between the logistics industry and its related industries and to calculate the dynamic degree of influence logistics industry exerts on relevant industries at the different periods.

According to the input-output analysis, we found results as follows. (1) the status of logistics industry remains to be further promoted. (2) The logistics industry turns into one with “low added value and strong leading force.” (3) Industrial logistics is the main trend while logistics of service industry change. (4) The logistics industry is closely linked with the second industry.

To promote the sustained healthy development of logistics industry and give full play to the role of logistics industry in the national economy, the authors then put forward countermeasures and suggestions: (1) Develop third-party logistic in order to promote the socialization and specialization level of logistics distribution. (2) Speed up the development of electronic business logistics, set up reasonable layout of transportation infrastructure, and build entitative logistics network. (3) Accelerate the logistics informatization and standardization and improve management and service levels of logistics enterprises.

url – https://chinafinanceandeconomicreview.springeropen.com/articles/10.1186/s40589-017-0059-x
courtesy – Springer

Solutions for SMEs’ difficulties in accessing finance: Asian experiences

Naoyuki Yoshino and Farhad Taghizadeh-Hesary
ADBI WP No. 768, 2017

Small and medium-sized enterprises face information asymmetries that hinder access to finance.

Small and medium-sized enterprises (SMEs) are the backbone of the Asian economy. They make up more than 96% of all Asian businesses that provide 2 out of 3 private sector jobs in the continent. Therefore, it is vitally important for the Asian economies’ economic success that they have fully functioning support measures for SMEs. However, SMEs face major challenges in accessing cheap finance, mainly because there is an asymmetric information problem between suppliers and demanders of funds, which hinders their growth. We highlight the difficulties of SMEs in accessing finance, and provide remedies for mitigating them. The remedies proposed in here include the development of credit information infrastructures for SMEs to remedy the asymmetric information problem, utilization of credit rating techniques for SMEs, the development of a sustainable credit guarantee scheme, the development of specialized private banks for SME financing, and the introduction of new ways of providing community-based financing such as hometown investment trust funds. We will provide operational examples from developed Asian economies such as Japan and the Republic of Korea, and developing Asian economies such as Thailand with a view to them being implemented in the rest of Asia.

url – https://www.adb.org/publications/solutions-smes-difficulties-accessing-finance-asian-experiences

courtesy – ADB

The interaction of clusters between manufacturing and producer services in China

Bingqiang Li
Economic Research-Ekonomska Istraživanja, 2017

Abstract : The interactive development of clusters between manufacturing and producer services is important for China to break its comparative economic dilemma. The scientific novelty in this article is embodied by the interaction of various clusters of manufacturing with producer services. Taking the location quotient as the index measuring cluster, it was found that various manufacturing clusters and producer service clusters in the east achieved comparative equilibrium, while the middle and the west were comparatively imbalanced in development. By comparison of influencing factors, it was shown that decline of energy consumption and technology level, acceleration of multinational corporations, strengthening of competition and cooperation and strictness of regulation are beneficial to traditional industrial clusters. However, the effects of these factors on modern industrial clusters were the opposite. Empirical analysis showed that traditional manufacturing clusters had a close relationship with traditional producer service clusters, and were the opposite with modern producer service clusters. Finally, the countermeasures for achieving the interacting development of industrial clusters were proposed from aspects of the gradient development of producer services clusters, the guidance of dominant industries in manufacturing clusters, promotion of industry clusters by centralising high-levelled elements and the diversity of policy guidance.

url – http://www.tandfonline.com/doi/full/10.1080/1331677X.2017.1355253
courtesy – T&F

Trade Liberalization, Rival Exporters and Reallocation of Production: An Analysis of Indian Manufacturing

Edwards, L. and Sundaram, A. (2017)
Review of International Economics

Employing a difference-in-difference estimation technique on firm-level data on Indian exporters, we show that the removal of US textile and apparel quotas was associated with a relative increase in sales of products where India was previously quota restricted, but a relative decrease in sales and the unit value of products where China was previously quota restricted. Our study hence highlights the importance of accounting for falling trade barriers for rival exporters in analyzing trade liberalization effects. Additionally, we find evidence indicating that quota rights were not allocated efficiently, suggesting potential gains from reallocation with the dismantling of the Indian quota licensing regime.

url – http://onlinelibrary.wiley.com/doi/10.1111/roie.12279/full
courtesy – Wiley

Innovative Experiences in Access to Finance : Market-Friendly Roles for the Visible Hand?

Augusto de la Torre, Juan Carlos Gozzi, and Sergio L. Schmukler
The World Bank 2017

Interest in access to finance and awareness of its importance have increased significantly since the early 2000s. Growing evidence suggests that lack of access to credit prevents many households and firms from financing high-return investment projects, which has an adverse effect on growth and poverty alleviation. Despite the increasing awareness of the importance of access to finance among both researchers and policymakers, there are still some major gaps in our understanding of the main drivers of access, as well as about the impact of different policies in this area. This book aims to fill some of these gaps by discussing recent innovative experiences in broadening access to credit in Latin America. These experiences are consistent with an emerging new view that, while recognizing the central role of the public sector in improving the contractual and informational environment for financial markets, also contends that there might be room for well-designed, restricted interventions in collaboration with the private sector to foster the development of financial markets and broaden access to them. In particular, the book analyzes, among other things, some interesting experiences from Brazil, Chile, Colombia, and Mexico that use different instruments to broaden access to credit in a sustainable way, such as structured finance, factoring, credit guarantees, and correspondent banking. Most of these experiences have led to financial innovation by developing new financial products and coordinating different players in the financial and real sectors to overcome barriers to access to credit. The book provides a first systematic analysis of these innovative experiences, including an analytical framework to understand problems of access to finance and a discussion of the effects and optimal design of public interventions. Finally, the book discusses some open policy questions about the role of the private and public sectors (including state‐owned banks) in broadening access to finance in a sustainable and market-friendly manner.

url – https://openknowledge.worldbank.org/handle/10986/27529
courtesy – The World Bank