Lost in the debate about whether developing countries should pursue manufacturing- or services-led growth is the potential for new AI tools to make even informal workers far more productive. If governments can broaden access to such technologies, they no longer need to choose between strategies.
BENGALURU—In a recent commentary, Dani Rodrik, one of the world’s leading experts on the economics of trade and development, explains why he became a “manufacturing skeptic” after decades of seeing industrial production as the key to unlocking economic growth. Since traditional manufacturing cannot absorb the 1.5 billion workers “in occupations that neither require university education nor are exposed to the international economy through trade or offshoring,” services-led growth models must take center stage. Expand the opportunities in retail, hospitality, and food service, and middle-class consumption will drive productivity gains.
BENGALURU—In a recent commentary, Dani Rodrik, one of the world’s leading experts on the economics of trade and development, explains why he became a “manufacturing skeptic” after decades of seeing industrial production as the key to unlocking economic growth. Since traditional manufacturing cannot absorb the 1.5 billion workers “in occupations that neither require university education nor are exposed to the international economy through trade or offshoring,” services-led growth models must take center stage. Expand the opportunities in retail, hospitality, and food service, and middle-class consumption will drive productivity gains.