Role Of The Manufacturing Sector Throughout Contemporary Economic Development

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The purpose of the paper is not simply to review and evaluate the role of the manufacturing sector in contemporary economic development, but also to find the gaps there may be in the literature on the topic. So that further study can be concentrated on filling these gaps. This paper attempts to review and evaluate the past and present performance of the manufacturing sector and its role in the contemporary economic development. The paper begins with an overview of the main arguments that supports the engine of growth hypothesis and next examines each of these arguments and challenges. The paper continues with the rise of the manufacturing sector and the case for the manufacturing sector using theoretical and empirical evidence. The paper…show more content…
“The process of converting raw materials, components or parts into finished goods that meet the customer 's expectations or specifications. Manufacturing employs a man-machine setup with a division of labor in a large scale production” (Business Directory)

What is the manufacturing industry?
“Manufacturing industry refers to those industries that involve in the manufacturing and processing of items and indulge in either creation of new commodities or in value addition.” (Economy Watch)
Of course, manufacturing is not synonymous with the industry. Industry can include mining and usually construction as well. Nevertheless, it is the specific characteristics of the manufacturing sector that can make it important as an engine of growth and therefore this can make industrialization essential for growth.
Recent studies show that has been a significant decline in the percentage of manufacturing in GDP. Even more so, it has been declining in the percentage of manufacturing in employment too, especially in advanced economies. The fall in the proportion of manufacturing in employment has been distinguished in the literature as de-industrialization. The levels of manufacturing employment that are corresponding to particular levels of GDP have fallen over time in the upper and middle-income economies (Palma 2005).
2. The Rise and Evolution of the Manufacturing Sector
Historically, the manufacturing sector has played a crucial role in economic growth. Manufacturing sector
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