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The rise and rise of services as East Asia’s new growth driver
Services have displaced manufacturing in generating growth and jobs – and there’s more to come.
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The services sector has outshone the manufacturing sector on many metrics over the past decade.
PHOTO: BLOOMBERG
For most of the past half century, East Asia’s economic success has been built mainly on manufacturing. Factories were the gateway for millions of workers to join the ranks of the middle class. China became a manufacturing superpower and the centre of supply chains for thousands of goods, with components coming from the rest of Asia, and this is still the case.
But it seems that the relative importance of manufacturing is on the wane. A new report by the World Bank on East Asia and the Pacific entitled Services For Development reveals that “with very few exceptions, manufacturing is playing a steadily diminishing role in both employment and output across the region”. Services have become an important, and unappreciated, driver of economic growth, job creation and international trade, it points out.
