5) Manufacturing boomed in developing nations that switched the basis of their c

Question

5) Manufacturing boomed in developing nations that switched the basis of their competitiveness from a low tech/low-wage bundle to a high tech/low wage bundle. Manufacturing slumped in locations that stayed with a combination of either high tech/high wage or low tech/low wage. Richard Baldwin(The Great Convergence: Information Technology and the New Globalization). Explain why there is still geographic specificity in terms of where the winners in the manufacturing revolution are found. How is India a special case?

Explanation / Answer

Contemporary globalization is broad based. It has been facilitated by the development of new technologies. Globalization has led to the deindustrialization of G-7 countries or North and industrialization of south or developing countries such China, India, Thailand and Indonesia. These developing countries are offering high tech and low wage economic system. Hence, most of MNCs have shifted their production facilities to these countries to reap the benefits of cheap and highly productive labors. It has radically change the way production is being carried out. But these production facilities are concentrated in certain geographical areas. Still movement of people across the frontier is expensive. Further, developing countries are offering incentives to business units who are located in specific areas. India is specific case, which offers cheap and highly productive labor. India has achieved new milestones in service sector due to development of Information Technology.

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