INFLUENCE OF DEINDUSTRIALIZATION ON MANUFACTURING VALUE-ADDED
Journal Title: Проблеми системного підходу в економіці - Year 2018, Vol 3, Issue 65
Abstract
Research objective is to examine the influence of deindustrialization processes on manufacturing value-added in various countries of the world. Manufacturing has been an important factor of economic growth of the country, however, during last years the tendency of decline of the manufacturing share in GDP is clearly noticeable. Recent experience has shown that each country needs to provide appropriate policy in order to reach proper functioning of the economy. Statistics demonstrates, that the average annual growth rate of global value-added is 2,9%-3,1%. However, it showed from 5,0% to 6,5% in developing countries in contrast to 2,3% to 3,1% in industrialized economies. It is proved that economic growth depends on the manufacturing value-added created in the economic system, which is the basis of the state's economic development. If deindustrialization in the country occurs “too early”, with too low per capita income and the level of industrial development of the economy, there is a risk of structural changes that shape the field of informal services with low productivity. Such changes have almost no potential to support economic growth. The negative deindustrialization of this kind is threatening for developing countries, as well as the new industrialized countries for several reasons. The importance of the manufacturing value-added creation, which is the basis of sustainable economic development, is decreasing. Practice has proven that manufactures exports is growing faster than the manufacturing value-added, and this trend is observed in all regions of the world, what is reflecting the internationalization and globalization of industry. Developing countries and other new industrialized economies show higher growth rates both in manufacturing and in manufactures exports.
Authors and Affiliations
A. V. Voloshanska
Keywords
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