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Varieties of deindustrialization and patterns of diversification: why microchips are not potato chips

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  • Dosi, Giovanni
  • Riccio, Federico
  • Virgillito, Maria Enrica

Abstract

Contrary to the notion of a natural tendency in deindustrialization, this paper, performing a cross-country long-term analysis, documents the existence of a variety of patterns of deindustrialization. Looking at industrial sectors and their technological characteristics, categorised on the ground of the Pavitt (1984) taxonomy, we do find a markedly uneven process of deindustrialization with Science Based and Specialised Suppliers not presenting any inverted U-shaped pattern, neither in employment nor in value added. The heterogeneity holds both for the four Pavitt aggregates and under further disaggregation at industry level. We then study whether the uneven sectoral composition had an impact on the timing of deindustrialization. Overall, our analysis supports the notion that “microchips” are not “potato chips” in their influence on the patterns of long-term economic development of different countries. Moreover, during the phase of globalization the probability for low-income countries to be stuck to produce “potato chips” has increased and that of transition toward the production of “microchips” has been reducing.

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  • Dosi, Giovanni & Riccio, Federico & Virgillito, Maria Enrica, 2021. "Varieties of deindustrialization and patterns of diversification: why microchips are not potato chips," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 182-202.
  • Handle: RePEc:eee:streco:v:57:y:2021:i:c:p:182-202
    DOI: 10.1016/j.strueco.2021.01.009
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    2. R, Rekha & M, Suresh Babu, 2022. "Premature deindustrialisation and growth slowdowns in middle-income countries," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 377-389.
    3. Caravella, Serenella & Crespi, Francesco & Cucignatto, Giacomo & Guarascio, Dario, 2023. "Technological Sovereignty and Strategic Dependencies: The case of the Photovoltaic Supply Chain," GLO Discussion Paper Series 1330, Global Labor Organization (GLO).
    4. Giovanni Dosi & Maria Enrica Virgillito & Xiaodan Yu, 2023. "Gains from trade or from catching-up? Value creation and distribution in the era of China’s WTO accession," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(1), pages 119-166, March.
    5. Federico Riccio & Lorenzo Cresti & Maria Enrica Virgillito, 2022. "The labour share along global value chains. Perspectives and evidence from sectoral interdependence," LEM Papers Series 2022/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. Carlos Bianchi & Fernando Isabella & Anaclara Martinis & Santiago Picasso, 2023. "Varieties of middle-income trap: heterogeneous trajectories and common determinants," Documentos de Trabajo (working papers) 23-16, Instituto de Economía - IECON.
    7. Giovanni Dosi & Federico Riccio & Maria Enrica Virgillito, 2022. "Specialize or diversify? And in What? Trade composition, quality of specialization, and persistent growth [Catching up, forging ahead, and falling behind]," Industrial and Corporate Change, Oxford University Press, vol. 31(2), pages 301-337.
    8. Stefano Costa & Stefano De Santis & Giovanni Dosi & Roberto Monducci & Angelica Sbardella & Maria Enrica Virgillito, 2021. "From organizational capabilities to corporate performances: at the roots of productivity slowdown," LEM Papers Series 2021/21, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    9. Andrea Coveri & Antonello Zanfei, 2023. "The virtues and limits of specialization in global value chains: analysis and policy implications," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 50(1), pages 73-90, March.
    10. Alberto Botta & Giuliano Toshiro Yajima & Gabriel Porcile, 2023. "Structural change, productive development, and capital flows: does financial “bonanza” cause premature deindustrialization?," Industrial and Corporate Change, Oxford University Press, vol. 32(2), pages 433-473.
    11. Dweck, Esther & Marcato, Marilia Bassetti & Torracca, Julia & Miguez, Thiago, 2022. "COVID-19 and the Brazilian manufacturing sector: Roads to reindustrialization within societal purposes," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 278-293.
    12. Fabrizio Ferretti & Michele Mariani & Elena Sarti, 2022. "Patterns of Deindustrialization: Are Countries Converging?," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(10), pages 1-78, October.

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    More about this item

    Keywords

    Deindustrialization; Structural change; Diversification; Technological change;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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