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The resultant division of labor across continents closely follows the North–South socio-economic and political divide, where in the North—with one quarter of the world population—controls four fifths of the world income, while the South—with three quarters of the world population—has access to one fifth of the world income.
A summary
The NIDL is a spatial division of labor due to cut ties with national economies. Underdeveloped economies used to be incorporated with the world economy as suppliers of minerals and agricultural commodities. It has since added more production to these types of economies. With this, a "global industrial shift" occurs, meaning that production processes are relocated from developed countries to developing countries. Companies need a low cost location in order to manufacture and assemble products. Developing countries are able to produce at substantially lower prices than a developed country would.
In the NIDL, the north controls about 3/5 of the world's income while the south controls about 1/5.
economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
Economics focuses on the behaviour and intera ...
, the new international division of labour (NIDL) is an outcome of globalization
Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
. The term was coined by theorists seeking to explain the spatial shift of manufacturing
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...
industries from advanced capitalist countries to developing countries
A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...
—an ongoing geographic reorganisation of production
Production may refer to:
Economics and business
* Production (economics)
* Production, the act of manufacturing goods
* Production, in the outline of industrial organization, the act of making products (goods and services)
* Production as a stati ...
, which finds its origins in ideas about a global division of labor
The division of labour is the separation of the tasks in any economic system or organisation so that participants may specialise (specialisation). Individuals, organizations, and nations are endowed with, or acquire specialised capabilities, and ...
. It is a spatial division of labor which occurs when the process of production is no longer confined to national economies
An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...
. Under the "old" international division of labor, until around 1970, underdeveloped areas were incorporated into the world economy principally as suppliers of minerals and agricultural commodities. However, as developing economies are merged into the world economy, more production takes place in these economies.
This has led to a trend of transference, or what is also known as the "global industrial shift", in which production processes are relocated from developed countries (such as the US, Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
an countries, and Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
) to developing countries in Asia
Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an area ...
(such as China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
, Vietnam
Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making i ...
, and India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
), Mexico and Central America
Central America ( es, América Central or ) is a subregion of the Americas. Its boundaries are defined as bordering the United States to the north, Colombia to the south, the Caribbean Sea to the east, and the Pacific Ocean to the west. ...
. This is because companies search for the cheapest locations to manufacture and assemble components, so low-cost labor-intensive parts of the manufacturing process are shifted to the developing world where costs are substantially lower. Companies do so by taking advantage of transportation and communications technology
Information and communications technology (ICT) is an extensional term for information technology (IT) that stresses the role of unified communications and the integration of telecommunications (telephone lines and wireless signals) and computers, ...
, as well as fragmentation and locational flexibility of production. From 1953 to the late 1990s, the industrialised economies' share of world manufacturing output declined from 95% to 77%, and the developing economies' share more than quadrupled from 5% to 23%.
The resultant division of labor across continents closely follows the North–South socio-economic and political divide, where in the North—with one quarter of the world population—controls four fifths of the world income, while the South—with three quarters of the world population—has access to one fifth of the world income.
A summary
The NIDL is a spatial division of labor due to cut ties with national economies. Underdeveloped economies used to be incorporated with the world economy as suppliers of minerals and agricultural commodities. It has since added more production to these types of economies. With this, a "global industrial shift" occurs, meaning that production processes are relocated from developed countries to developing countries. Companies need a low cost location in order to manufacture and assemble products. Developing countries are able to produce at substantially lower prices than a developed country would.
In the NIDL, the north controls about 3/5 of the world's income while the south controls about 1/5.
See also
*Global workforce
Global workforce refers to the international labor pool of workers, including those employed by multinational companies and connected through a global system of networking and production, foreign workers, transient migrant workers, remote workers, ...
* International relations
International relations (IR), sometimes referred to as international studies and international affairs, is the scientific study of interactions between sovereign states. In a broader sense, it concerns all activities between states—such as ...
* South–South cooperation
South–South cooperation (SSC) is a term historically used by policymakers and academics to describe the exchange of resources, technology, and knowledge between developing countries, also known as countries of the Global South. The Global Sout ...
References