Sectoral Shifts and NIDL (New International Division of Labour) Case Study: The British clothing Industry

As a country undergoes sectoral shifts, older, lower sector activities and industries may delocalise abroad, become abandonned or become dominated by foreign competitors. This results in what has been termed the New International Division of Labour (NIDL). Since World War II, the British textile industry, once dominant on a global scale, has declined, and been transferred to developping LEDCs and NICs. First to « first generation NICs » like South Korea, then, as these have also undergone sectoral shifts, to more recent, « third generation NICs » like China. Britain, meanwhile, has moved up into higher level manufacturing and, since the 1980s, Tertiary and Quaternary sector activities.

On the global scene In Medcs , The manufacturing sector continues to be of significant importance , however, like most western economies, it has seen a decline in its share of employment whereas The share of employment in the service sector of the economy has increased dramatically The middle income countries are following the same trend, job losses have been concentrated in traditional sectors such as textile production and metal products The low income countries are still highly dependant on the agricultural sector , but richer countries and TNC’s are also relying on their workforce for their factories, thus making it difficult for the country to evolve

Clothing industry in the UK Traditional Scottish Industries in Decline

WHY? The interest in more profitable, better paying higher sector activities. The increase in British standards of living and wages: the introduction of the national minimum wage (1999). The increasing costs to companies of ensuring good working conditions, accident insurance etc… The long term loss of comparative advantage in textiles Minor reasons such as the diversification of the textile sector

Consequences In the UK, the proportion of workers employed in industry has fallen from around 40% at the beginning of the 20th century to less than half that now • The manufacturing is now done in LEDCs by trans-national companies who generally have their headquarters in the home country of the brand. • Sectoral shifts in MEDCs . In the UK , the tertiary sector represents 73% of GDP

Textile factory in Africa

Labour cost in the apparel industry (hourly wages)