Outsourcing and the shift from manufacturing to services

Giuseppe Berlingieri 25 September 2014

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How much of the structural transformation of modern economies from manufacturing to services is a shift in organisational boundaries, in which work that was previously done within manufacturing firms is now outsourced to specialised service providers? This column looks at changes in the US economy over the past 60 years, and shows that the evolution of the input-output structure – which is mostly due to professional and business services outsourcing – accounts for 36% of the increase in services and 25% of the fall in manufacturing.

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Topics:  Global economy Labour markets

Tags:  outsourcing, manufacturing, services, marketing, US, professional and business services

Service sector regulation and exports: Evidence from Spain

Rafael Doménech, Mónica Correa-López 10 August 2014

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During the crisis, recommendations to improve market functioning in advanced economies have ranked consistently high in the policy portfolio of international institutions (OECD 2014, Buti and Padoan 2013). Among the guidelines, the removal of anti-competitive regulations in the provision of key services that are inputs to other stages of production may be especially relevant to firm performance.

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Topics:  International trade

Tags:  services, regulation, service sector, liberalization

Protection of intellectual property to foster innovations in the service sector

Masayuki Morikawa 20 July 2014

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Given the declining labour force due to population ageing, accelerating the productivity growth of industries – especially the service industries – is an important element of the growth strategy in Japan and most advanced countries. While there are a variety of factors affecting productivity, innovation is one of the key determinants of productivity growth. However, innovation in the service sector has not been studied well. I present findings on innovation in the service sector by focusing on the effect of intellectual property rights on innovation.

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Topics:  Productivity and Innovation

Tags:  R&D, growth, productivity, patents, Japan, innovation, services, intellectual property, trade secrets

Trade and innovation in services

Leonardo Iacovone, Aaditya Mattoo, Andrés Zahler 15 September 2013

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The literature on innovation and international trade has, until recently, focused almost exclusively on the manufacturing sector. This is not surprising because the bulk of international trade has been in manufactured products and innovation has traditionally been associated with new or improved physical products. The services sector was ignored because it was seen as largely untouched by both trade and innovation.

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Topics:  Development Productivity and Innovation

Tags:  manufacturing, services

The real exchange rate and export growth: Are services different?

Barry Eichengreen, Poonam Gupta 18 January 2013

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The role of exports in economic growth and, in turn, of the real exchange rate in export promotion features prominently in literature on development and globalisation (Rodrik 2009, Haddad and Pancaro 2010). Much of this literature dates, however, from an era when ‘exports’ meant ‘exports of merchandise‘. Today, ‘exports’ increasingly means ‘exports of services’. This raises the question of whether the emphasis in the earlier literature on the importance of a competitively valued exchange rate for promoting exports carries over to this new environment.

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Topics:  Exchange rates International trade

Tags:  exchange rates, exports, services

Spatial disparities in India: Have Mumbai and Chennai become too congested?

Klaus Desmet, Ejaz Ghani, Stephen D O'Connell, Esteban Rossi-Hansberg 13 June 2012

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In the last two decades the Indian economy has been growing at unprecedented rates, but that development has led to widening spatial disparities. While some cities such as Hyderabad have become major high-tech hubs with world-class companies and real estate developments reminiscent of Silicon Valley, many other places remain mired in poverty and stagnation.

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Topics:  Development Industrial organisation Productivity and Innovation

Tags:  India, manufacturing, services, Mumbai, Chennai

Are China and India converging?

Ejaz Ghani 23 January 2012

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Both China and India have attracted global attention for rapid growth, but their growth patterns are very different (Rajan 2006, Pack 2008, Bosworth and Maertens 2010). China took the conventional route of manufacturing-led growth and is recognised as a global leader in manufactured exports. India followed the unconventional route of service-led growth and has acquired a global reputation for service exports. Are their growth patterns converging? Is China catching up in services? Is India catching up in manufacturing? Or has hysteresis kept their growth patterns different?

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Topics:  Development International trade

Tags:  China, India, manufacturing, services

Boosting growth in high-debt times: The role of service deregulation

Federico Cingano, Guglielmo Barone 06 December 2011

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Many European countries face the challenge of credibly reducing their debt-to-GDP ratios. Boosting output growth is therefore an urgent and key political and economic priority. Given the existing constraints to demand-side measures, most observers see structural (supply-side) reforms as the main policy tool such countries have at their disposal to “grow out” of their debt problems (e.g. Ivanova et al. 2011, Fernandez-Villaverde and Rubio-Ramirez 2011, Amato et al. 2010). The specific measure they should focus on and the gains to be expected from such reforms are, however, less clear.

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Topics:  Productivity and Innovation

Tags:  growth, services

Services trade liberalisation and regulatory reform: Re-invigorating international cooperation

Bernard Hoekman, Aaditya Mattoo 24 December 2010

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Trade in services has a mountain to climb. In both high-income and developing countries, the barriers to trade and restrictions on investment in the services sector are far higher than for the goods sector. In emerging markets the discrepancy is even more severe (see Figure 1 and Borchert et al. 2010). The costs of such policies are big and wide.

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Topics:  International trade

Tags:  Doha Round, trade, services

Regulatory reform in services sectors: The missing explanation for the revival of Indian manufacturing?

Jens Matthias Arnold, Beata Javorcik, Molly Lipscomb, Aaditya Mattoo 12 October 2010

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A vital element of India’s rapid economic growth since the early 1990s has been the impressive performance of its manufacturing industries. Output in manufacturing grew by 5.7% per year in the period 1993-2005, while exports grew at almost twice that rate (Reserve Bank of India 2008). The conventional explanations for the revival of Indian manufacturing point to policy reforms in manufacturing industries, such as tariff liberalisation and the dismantling of the “license raj” (Aghion et. al. 2005, 2008), and limited labour market reforms (Besley and Burgess 2004).

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Topics:  Development International trade

Tags:  India, international trade, liberalisation, services

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