Chandra, VandanaLin, Justin YifuWang, Yan2012-03-192012-03-192012-03-01https://hdl.handle.net/10986/3288Modern economic development is accompanied by the structural transformation from an agrarian to an industrial economy and occurs through a process of continuous industrial and technological upgrading. Since the 18th century, all countries that industrialized successfully in Europe, North America and East Asia followed their comparative advantage and leveraged the late-comer advantage to emulate the leader-follower flying geese pattern of industrial upgrading. The large dynamic emerging market countries such as China, India and Brazil are also engaged in industrial upgrading but with a critical difference. In particular, because of its sheer size, China has absorbed nearly all labor-intensive jobs and become the world s largest exporter of labor-intensive products. The current view is that China s dominance hinders poor countries from developing similar industries. The authors argue that industrial upgrading has increased wages and is causing China to graduate from labor-intensive to more capital- and technology-intensive industries. These industries will shed labor and create a huge opportunity for lower wage countries to start a phase of labor-intensive industrialization. This process, called the Leading Dragon Phenomenon, offers an unprecedented opportunity to low-income Sub-Saharan Africa where the industrial sector is underdeveloped and investment capital and entrepreneurial skills are leading constraints to manufacturing. It can seize the opportunity and resolve the constraints by attracting some of the OFDI flowing currently from China, India and Brazil into the manufacturing sectors of other developing countries. All low-income countries will compete but to catch the jobs spillover from China, the winner must implement credible economic development strategies that are consistent with its comparative advantage.CC BY 3.0 IGOABSOLUTE POVERTYAGRICULTURAL SECTORAGRICULTUREAUTOMOBILEAUTOMOBILESBANKING SYSTEMBINDING CONSTRAINTSBUSINESSESCAPABILITIESCAPITAL ACCUMULATIONCAPITAL INTENSITYCENTRAL BANKCOMMERCECOMMODITIESCOMMODITYCOMMODITY EXPORTSCOMPARATIVE ADVANTAGECOMPARATIVE ADVANTAGESCOMPETITIVENESSCOMPUTERSCONSUMER GOODSCOST STRUCTURESCREDIT RATIONINGCURRENCYDATA LIMITATIONSDEVELOPED COUNTRIESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT AGENCIESDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDEVELOPMENT STRATEGIESDISTRIBUTION SYSTEMDIVERSIFICATIONDIVIDENDSDOMESTIC CURRENCYDOMESTIC MARKETDOMESTIC MARKETSDOMESTIC SAVINGSDYNAMIC EMERGING MARKETECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC HISTORYECONOMIC PROJECTIONSECONOMIC STRUCTUREECONOMIC TRENDSELECTRICITYELECTRONICS INDUSTRYEMERGING ECONOMIESEMERGING MARKET COUNTRIESEMERGING MARKET ECONOMIESEMERGING MARKETSEMPIRICAL EVIDENCEENTREPRENEURIAL SKILLSEQUIPMENTEXPORT GROWTHEXPORT MARKETSEXPORT OPPORTUNITIESEXPORT PROMOTIONEXPORT SHAREEXPORT SUBSIDIESEXPORTEREXPORTERSEXPORTSEXTERNALITIESEXTREME POVERTYFACTOR ENDOWMENTSFINANCIAL CAPITALFINANCIAL CRISISFOREIGN CAPITALFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN INVESTMENTFOREIGN INVESTORSFOREIGN VALUEGDPGDP PER CAPITAGLOBAL ECONOMYGLOBAL EXPORTSGLOBAL MARKETGLOBAL MARKETSGLOBAL SUPPLY CHAINSGLOBALIZATIONGNPGOLD STANDARDGOVERNMENT CONTRACTSGOVERNMENT SUPPORTGROWTH MODELSGROWTH PATHGROWTH RATEGROWTH RATESGROWTH STRATEGYINCOMEINCOME GROWTHINCOME LEVELINCOME LEVELSINDIVIDUAL FIRMSINDUSTRIAL BASEINDUSTRIAL COUNTRIESINDUSTRIAL COUNTRYINDUSTRIAL DEVELOPMENTINDUSTRIAL ECONOMYINDUSTRIAL PRODUCTIONINDUSTRIAL REVOLUTIONINDUSTRIAL SECTORINDUSTRIAL STRUCTUREINDUSTRIALIZATIONINFORMATION COMMUNICATIONINFORMATION TECHNOLOGYINNOVATIONSINSTRUMENTINTEREST RATESINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTINTERNATIONAL STANDARDSINVESTMENT CAPITALINVESTMENT POLICYJOINT STOCK COMPANIESJOINT VENTURESLABOR FORCELIBERALIZATIONLIBERALIZATION OF TRADELICENSELICENSESLOW-INCOME COUNTRIESLOW-INCOME COUNTRYMANAGERIAL SKILLSMANUFACTURINGMANUFACTURING INDUSTRIESMANUFACTURING INDUSTRYMARKET COMPETITIONMARKET FAILURESMARKET MECHANISMMARKET SHAREMARKET SHARESMATERIALMEDIUM TERMMONOPOLYMOVMULTINATIONAL CORPORATIONSNATIONAL ACCOUNTSNATIONAL INVESTMENTNATURAL RESOURCENATURAL RESOURCESNEW MARKETNEW PRODUCTNEW TECHNOLOGIESNEW TECHNOLOGYOPEN ACCESSOPEN ECONOMIESOUTPUTPER CAPITA GROWTHPER CAPITA INCOMEPER CAPITA INCOME LEVELSPER CAPITA INCOMESPOLICY INTERVENTIONSPOLICY RESEARCHPOLICY STANCEPOLITICAL STABILITYPOOR COUNTRIESPOOR PEOPLEPOVERTY LINEPOVERTY RATEPOVERTY RATESPOVERTY REDUCTIONPRIMARY PRODUCTSPRIVATE CAPITALPRIVATE SECTORSPRIVATIZATIONPRODUCT DIFFERENTIATIONPRODUCTIVITYPRODUCTIVITY GROWTHPROTECTIONISMPUBLIC WORKSR&DRADIOSRAPID DEVELOPMENTRAPID ECONOMIC GROWTHRAPID GROWTHRAPID INDUSTRIALIZATIONREAL GDPRESERVERESULTRESULTSRETAIL TRADERETURNSRICH COUNTRIESRURAL AREASSAVINGSSEMICONDUCTORSETTLEMENTSKILLED LABORSKILLED WORKERSSTATE-OWNED ENTERPRISESSTRUCTURAL CHANGETAXTAX COLLECTIONTECHNOLOGICAL INNOVATIONTECHNOLOGICAL PROGRESSTECHNOLOGY FRONTIERTECHNOLOGY TRANSFERTELEGRAPHTRADE BARRIERSTRADE DEFICITTRADE REGIMETRADINGTRANSACTIONTRANSACTION COSTSTRANSISTORTREATIESTREATYURBAN AREASVALUE ADDEDVALUE CHAINWAGESWEBWORLD DEVELOPMENT INDICATORSWORLD ECONOMYWORLD MARKETWORLD MARKETSWORLD TRADEWTOWorld Bank10.1596/1813-9450-6000