Product Standards, Exports and Employment: An Analytical Study

Rajat Acharyya

Mar 2006 · Springer Science & Business Media

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Through the process of globalization, the trade dependence and int- dependence of the developing countries have increased phenomenally than ever before. The characteristic of this late twentieth-century globalization process has been the new technological revolution that has led to a high rate of world exports of electronics and other high-technology products. This has marginalized most of the developing countries exporting largely the low quality and low value-addition manufacturing and primary products, barring a few exceptions like China, India and Mexico. The fruits of globalization have, therefore, been unevenly distributed so far across the developed and the developing countries. Moreover, whatever little growth in exports of medium technology products has been achieved by a few of them, is largely driven by outsourcing of low value-addition and low- stage of activities by the foreign multinationals. Outsourcing of software services, rather than development of software packages, in India and assembly line for automobiles in Mexico are the two glaring examples. These activities may have boosted the total exports of these countries, but they have failed to generate any feedback effect on the rest of the economy in terms of skill formation, increase in overall productivity level and product diversification.