[pushAUX.com] It used to be that the manufacturing sector was considered as the savior of developing countries, but according to some key experts in the Asian Development Bank (ADB), this may change in the future.
(pushAUX: yes, it was hard for us to believe that there are ADB bloggers, but here we are. Scary thought though: can these guys also be termed as ADB influencers?)
In an ADB blogpost, economist Matthias Helble, technology and innovation specialist Sameer Khatiwada, and an expert on trade development, Ben Shepherd, collectively put forward that the manufacturing sector has started to decline in terms of its positive benefits to an economy, and that a good way to offset its diminishing value is to increase productivity in the service sector.
“With new technology, new industries and occupations are emerging, and countries need to be able to capture these new growth sectors rather than making ill-advised policy interventions to support manufacturing…”
The trio added that manufacturing in its current state has become too capital-intensive which limits its capability to generate jobs on a large scale.
Philippine BPO’s in the Limelight!
“A good example of nurturing a service sector is the IT-BPO industry in the Philippines. It has grown out of little in 2000 to one of the most important industries in the Philippines today, accounting for close to 10 percent of GDP and employing over a million workers in relatively high-paying jobs…”
The post authors added that for a country to grow its service sector, it will need to open up to greater competition (i.e. lessen government regulation); in doing this – prices will lessen, quality will increase, and service availability will be enhanced.
A Highly Skilled Workforce!
The three furthered that it was important for a country to invest in skilling up its workforce through the development of school curricula that are aligned to the requirements of the service sector; infrastructure development for electricity, Internet connectivity and capacity, and a “transparent and simple regulatory framework” will also help.
The post added that jobs in the service sector are:
- Estimated to account for two-thirds of economic activity globally
- Constitute half of the world’s work force
“Every day, more jobs are created in services than in manufacturing and this holds equally for developed and developing countries… The manufacturing sector was responsible for less than 20 percent of new jobs.”
Hopefully some supposed “experts” in the government take note of this.