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Technology guides production and sourcing patterns, World Bank Report

As advances in technology and changing trade patterns affect opportunities for export-led manufacturing, innovations like smart automation, advanced robotics and 3-D printing are increasingly influencing which locations are attractive for production, says a World Bank Report. While these shifts threaten significant disruptions in future employment, particularly for low-skilled workers, they also offer opportunities.

Technology and globalization are changing how manufacturing contributes to development. In the past, the manufacturing sector created jobs for unskilled workers and increased productivity. In the future, developing countries will need to update their policies along with their infrastructure, firm capabilities and job creation strategies to meet the demands of a more technologically advanced world.

Changing technologies and shifting globalization patterns are destined to reshape manufacturing-led development strategies. Global value chains remain concentrated among a relatively small number of countries, and smart automation, advanced robotics, 3-D printing and other advances being incorporated by global manufacturers of apparel, cars, electronics, consumer and other goods are shifting how countries and firms compete for production.

While manufacturers of apparel and leather goods have traditionally sourced production in countries with low labor costs, greater demands for customization opens up the possibility of 3-D printed goods, which are design-intensive, typically produced in small batches on short cycles, and require proximity to consumer markets.