From Manufacturing-Led Export Growth to a Twenty-First Century Inclusive Growth Strategy
Explaining the Demise of a Successful Growth Model and What to Do about It
Success in economic development over the past half-century was based on manufacturing-led export growth. Because the share of global employment in manufacturing is set to continue to decline, manufacturing will not play the same role in the future. The author deconstructs what enabled manufacturing to generate growth and structural transformation. The strategy proposed is multi-pronged, addressing separately, in different sectors, the challenges of learning, foreign exchange, and employment. A carefully designed, coordinated multi-sector strategy, with sectoral policies in agriculture, natural resources, manufacturing, and especially services, has the prospect of attaining the same success as the old manufacturing-led export strategy. To implement it, countries will require active industrial policies based on a new understanding of dynamic comparative advantage. The creation of a global reserve system could help provide the finance required for success. New development strategies will require greater balance among the market, state, and community—a perspective articulated in the Stockholm Statement.
About the Author
Initiative for Policy Dialogue (IPD)
Joseph E. Stiglitz is co-President of the Initiative for Policy Dialogue, and Chairman of the Committee on Global Thought at Columbia University. He is University Professor at Columbia, teaching in its Economics Department, its Business School, and its School of International and Public Affairs. He chaired the UN Commission of Experts on Reforms of the International Monetary and Financial System, created in the aftermath of the financial crisis by the President of the General Assembly. He is former Chief Economist and Senior Vice-President of the World Bank and Chairman of President Clinton’s Council of Economic Advisors. He was awarded the Nobel Memorial Prize in Economics in 2001.