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The global industrial arms race is just what we need
Manufacturing is undergoing a revival around the world, sending several secular trends into reverse
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Global defence spending rose sharply last year to well over US$2 trillion (S$2.7 trillion) and is set to rise faster still this year.
PHOTO: REUTERS
Andy Haldane
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A global arms race to reindustrialise is under way, reversing long-established trends in many advanced economies. The forces driving this race – decarbonisation, deglobalisation, remilitarisation – are likely to have lasting implications for the global macroeconomy and may even help it break free from secular stagnation.
Manufacturing has been in secular decline in many advanced economies. At its peak, it accounted for almost half of output and employment in Britain. Today, it stands at less than 10 per cent. Manufacturing in the United States peaked in the 1950s at about 28 per cent share of the economy, but has fallen to little more than 10 per cent.
