Skill-Upgrading in Developing Countries Alters Global Production Chains

• Main Author: JAKOBSSON, Amanda
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2013
• Subjects: Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/1585
• Institution: Singapore Management University

Poverty decline in Africa and Asia by 2030 results in a large increase in skill-acquisition as people can afford more education. A rise of these new middle-income countries will therefore lead to a large increase in the pool of the world’s middle-skilled workers. Production of manufactured goods is fragmented to a large extent across countries already today. The last few decades have seen the offshoring of labor-intensive tasks in global production, making China the factory of the world; this will by 2030 likely be followed by massive offshoring of skill-intensive tasks – such as the assembly of advanced components, coordination of upstream component production and managerial tasks. The winners of the economic race across these emerging economies will be the countries that develop the transport technology, infrastructure and judicial systems (to enforce supplier contracts) to grab a chunk of the newly offshored tasks of global production chains.