new international division of labour

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new international division of labour (NIDL)

the change in the world economy whereby some manufacturing processes are located in the THIRD WORLD. Frobel et al. (1980) offer the most systematic analysis of this process, arguing that changes in communication and transport in the 1970s, combined with slow-downs of growth and profitability in the most advanced capitalist industrial countries, have made the location of manufacturing in the Third World profitable. Most commonly, assembly processes in textiles and electrical goods were moved by TRANSNATIONAL COMPANIES to countries which had cheap and politically repressed labour forces. Typically the factories were located in Free Trade Zones without tariff or other barriers on imports or exports. Nearly all the production was exported, giving rise to the term World Market Factories and to EXPORT-ORIENTED INDUSTRIALIZATION. Changes in production processes, telecommunications and transport meant that large firms could use skilled and technical labour for some processes in advanced countries, and untrained, low-paid labour for routine processes in the South. Any one product could be assembled from components produced in several different countries.

Whilst the term has come into more general usage to account for the emergence of manufacturing processes in the South, the analysis provided by Frobel et al. is only partial. As Jenkins (1984 and 1986) has cogently argued, the industrialization process in the Third World is more complex and varied. Thus, little of the Latin American manufacturing capacity is located in World Market Factories or Free Trade Zones and much of the Southeast Asian industrialization is locally owned and covers a wider range of processes than routine assembly. But it remains true that some of the poorer and smaller Third World countries may only have this type of manufacturing. Recent changes may be leading to the reversal of this process. For example, computerization of textile production favours relocation back to Northern countries. See also NEWLY INDUSTRIALIZING COUNTRIES, DEPENDENT INDUSTRIALIZATION, DIVISION OF LABOUR.

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