Perspectives from ISB

In the article “How important is manufacturing to emerging markets?” Rob Minto, editor of the FT’s emerging markets desk in London identifies several interesting themes. One surprising theme is that even India has made large strides towards improving its ranking (from 14 to 10) and aims to continue on this path and increase the share of manufacturing in the GDP. A second theme is the demand for services from the growth in manufacturing has contributed significantly to growth of output in China. He suggests that the connection between manufacturing and services¬† growth is stronger in emerging markets than in mature economies. There are many implications of this finding, starting with whether the nature of these services is different in EMs, how are these services being staffed and managed, to whether the services play an important role in raising productivity or capturing value in the manufacturing sector.