DONALD HEPBURN, fellow of International Economics at Chatham House traces the changes in the world’s industrial landscape over the past 25 years and states that globalization, lower trade barriers, transport costs and a surge in international capital flows were a powerful enabler of transformation of the industrial landscape. He states that manufacturing shifted from industrialized to developing countries with developing countries increasing their share from 20% in 1995 to 28% in 2008 while industry’s share of world value added fell from 35% in 1985 to 27% in 2008 driven by fragmentation of the operations followed by outsourcing
In his Chatham House article, "Mapping the World's Changing Industrial Landscape", he states that that while demand drivers such as demographic factors such as urbanization, ageing, income growth and elasticity, and changing tastes had the potential to transform large swathes of industries such as consumer durables, automobiles, aviation, and health services; supply drivers such as availability of skilled labour, capital, infrastructure and supportive business environment could determine growth of industries and services within the developing countries. He cautions that the shift of industry to developing countries could be slowed by increased transport costs, changes in exchange rates and a backlash against globalization in developed countries if growth proved elusive and unemployment stayed high.
In his Chatham House article, "Mapping the World's Changing Industrial Landscape", he states that that while demand drivers such as demographic factors such as urbanization, ageing, income growth and elasticity, and changing tastes had the potential to transform large swathes of industries such as consumer durables, automobiles, aviation, and health services; supply drivers such as availability of skilled labour, capital, infrastructure and supportive business environment could determine growth of industries and services within the developing countries. He cautions that the shift of industry to developing countries could be slowed by increased transport costs, changes in exchange rates and a backlash against globalization in developed countries if growth proved elusive and unemployment stayed high.
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