 OK. I think we can start. Hello, everybody. This is the Seventh Industrial Development and Policy Lecture, organized by the SOAS IDP Research Cluster, which is a research cluster hosted by the Economics Department, which involves quite a lot of people from three different departments in SOAS, in particular from Economics Development Studies, and partially also from DEFIMS. All scholars involved in many ways working on issues related to industrial development, transformation, policy, and so on. Many of you probably attended also the last lecture by Mariana Matsukato, and today we are extremely privileged to have one of the most well-known and scholar who has been doing similar work in many of the areas that we have been covering in this lecture series, Professor Rafiq Aplinski. He has been a professor, and now he is a meritus and honorary professor at Auburn University and IDS, and more recently has rejoins through at University of Sussex. Rafiq's work has been covering really the most important issues in the areas of industrial development and policy from technology, industry-specific studies, globalization, the impact of organizational transformation on global production networks and global value chain, is work from famous book from 2005, Globalization of Poverty and Inequalities, been one of the most well-known reference book contribution in this literature. More recently has been also looking at the impact that China and other big international drivers are having in the transformation of global value chains and global production networks around the world. What I always appreciated from Rafiq's work is extremely powerful analysis of production and technologies. Remember, we met sometime ago, two, three years ago, in Azerbaijan, at some point after our presentation, Rafiq came to me and said one time I was an economist, then I started visiting companies and became too late, was too late to go back. And I remember that because in a sense captured this very strong emphasis on understanding micro level dynamics and being able to link that up to global value chain and policy issues. I'm not taking more time, of course you know it's been involved in many projects and work with UN organization, UNIDO, UNCTAD and that has been working widely with many governments, in particular with the South Africa government over the last years. So today's talk is quite a provocative talk for a serious, which actually has been celebrating industrial policy, which says end of industrial policy, if so, what then? So, let me leave the floor to Professor Kapliski and let me welcome him with a round of applause. Thank you Antonio, it's a pleasure to be with you. Of course, I've had a long time association with SOAS who could not. I know you want the answer to be 13 or 23 or 77. That is a very clear and specific answer and I'm not going to give you a very clear and specific answer, but I am going to address the complexity of industrial policy. And I suppose I'm going to be critical of many of the traditional ideas in industrial policy, but I'm not going to come at it from a neoliberal perspective, which says that we've got to get out of all policy because of rent-seeking behavior and we should let the market allocate resources. As you will see, I'm absolutely not in that territory, but I'm in a territory which is a little skeptical of traditional industrial policy. So let's just set the tone. What do we mean by industry? Technically, of course, industry is more than manufacturing, but in fact, most of us talk about manufacturing and it's in that sense that I'm going to be talking about industrial policy. So just a bit of homework before we start. Why might we be concerned to industrialize? Well, historical experience is that the hyper-captain countries or countries with large shares of manufacturing in GDP. Engels law, as per capita incomes rise, people consume less and less of agricultural products, so we thought, but I wonder about that, more and more of manufacturers. Manufacturing is labor intensive. It's an opportunity to spread the gains around the economy. The barriers to entry are high in manufacturing and therefore you can keep competitive pressures at bay. And unlike agriculture, where supposedly the barriers to entry are very low, where incomes are low, manufacturing or industry is an arena where you can actually protect yourself more from competition through technology and various other proprietary assets and therefore you can have high and sustainable incomes. Price of agricultural products and commodities falls in time compared to the price of manufacturers. Let's see, I'll show you some data to question that. Productivity growth is more rapid in manufacture than it is in agriculture. Undoubtedly this case is true. Manufacturing a source of exports and that's important because Adam Smith, the greater the division of labor, the greater productivity growth, the larger the market, the more scope for specialization and productivity growth. That's one reason why you want to exports. You have economies of scale in exports and that is a source of productivity growth, so-called Verdun's law and it releases the foreign exchange gap and provides resources for other productive sectors, infrastructure and social expenditure. Now, that's a tableau of the arguments for industry and I'm going to be addressing some of those in the following way. Firstly, there are a battery of instruments for industrial policy. I've just given you a range of them, protection, investment subsidies, industrial licensing, export subsidies, local content, development finance, special economic zones and so on. But I'm going to be focused on two parts of the industrial policy arena. That's the main part of my discussion today. The first one is that structural transformation and industrialization, and I'll talk a bit about the lineage of that, is achieved by moving through the sectors, so-called normal patterns of industrial growth. And so you have Hollis-Chennery, Sirkwen, Moshe Sirkwen, you need a flying, you know about the flying geese model, and Justin Lin, formerly chief economist at the World Bank, choose a country with approximately double your per capita income, look at their sectoral structure, target those sectors, and you will soon be where they were. So there's a general here with the normal patterns of industrialization, that you begin with garments and furniture and shoes and then gradually you make all your way, all the way up the tree of industry until you're making, designing and making semiconductors, so I'm going to be looking at that one, and the second part of industrial strategy I'm going to look at is the route to the building of incomes and capabilities to be found in import protection, that is protecting yourself from competition. Now, as you all know, the neoliberal agenda was very much against import protection, so you might find it interesting to see why I might be critical of import protection as well. With a particular focus, you remember the reasons for industrialization, I'm particularly interested in two parts of that, delivering sustainable income growth in an economy which is trading with the world. I'm not suggesting that economies are completely integrated, but the world is reasonably open, and secondly, I'm concerned with manufacturing industrialization, which delivers employment and inclusion. So, my last slide before the first end of this first segment is so-called normal patterns of industrialization. Don't know how many of you know the literature, but essentially what has happened over the years is that there have been analyses of the shares of different sectors in different countries, and in particular point in time, so you would take countries which have a per capita income of $1,000 per year, and you'd look at the share of different sectors there, countries with a per capita income of $5,000 a year, and look at the share of different sectors there, all the way through until $20,000, $25,000, and from that, you get a normal pattern of industrialization. So, you can see that this one here, which is with his textiles, low levels per capita income, the share of textiles in GDP will be higher as per capita incomes grow, the share of textiles will be lower, whereas this one here with a circle through it, is chemicals and chemical products, and this is a perspective which has underlies much of industrial policy, essentially says, look, you've just got to grow through these phases, and if you can manage this process of structure transformation, you will be on your way to sustainable income growth, and you will find it in most of the standard literature on industrial policy, go to the, what are really, really good now, the UNIDO industrial development reports done every year, and you'll find that that's in the reports, this is from the paper to one of the industrial development reports some years ago. Antonio, instead of speaking and then stopping, which will put me to sleep as well as you, I prefer to stop at various stages and take one or two questions and comments. So, you can see where I'm going, any questions about what we've done so far. Okay, we have a series of reasons why you might want to have industry. I'm focused and I didn't talk about why you want a policy intervention, we don't have the time for that. I'm looking at two parts of the classical industrial policy agenda, which is sexual transformation and import protection, protecting your industry against imports. And I'm concerned about that because I want to see how we can create sustainable income growth on the one hand, and maximize employment and inclusion on the other hand. And I'm going to have five assertions which I'm going to go through one by one. Firstly, as theoretical point, that we'll have some empirical material. You'll get a sense of what I mean as I go along. Sustainable incomes are provided by the generation and appropriation of rents. Remember I spoke about barriers to entry in the first slide, that is protecting yourself from competition. It used to be thought that manufacturing was much more protected from competition in other sectors. And I'm going to argue that that is no longer the case about manufacturing in general, although it may be the case about particular parts of manufacturing. That's the first assertion I'm going to make. Secondly, why I'm not giving you the answer, 77, nuance is important, I'm not going to talk about one industrial policy, I'm going to talk about two or three different sets of policies, and the problem then is how you sew them all together. The third issue is around not so much industrial policy, but innovation policy and focusing on the building of capabilities, as opposed to sectors. Following from that, are we talking about a productive sector, a productive, I'm sorry, there should be that in the run. Are we talking about industrial policies or are we talking about productive sector policies? No longer privling just industry, and finally I want to talk about inclusive industrialization, which is the story about employment and participation, and who industry is producing for. So that's really the heart of what I'm saying, you don't have to take it down now, I'm going to go through those one by one. Again, any questions? I begin with the first one. Here's the assertion. In a reasonably open economy, sustainable incomes, which after all is what industrial policy is about, that's really, you don't have industry for industry's sake, you have industry because you have sustainable and spread incomes. Sustainable incomes are provided by the generation and appropriation of rents, so what do we mean by that? There are two sources of industrial growth. The first one is extensive growth, which is doing the same thing over and over and over again. So you can actually get industry to grow by just replicating exactly the same type of factory, type of industry all over the economy. We call that extensive growth. Intensive growth is when you build new plants, you actually incorporate some level of technological change. Now, if you're in a closed economy, the first one is completely viable. You can go on growing your industry by just having the same plant built over and over and over and over again. But once you're in a competitive world, once there's technological change occurring in your sector, it's no longer feasible almost always, there's some exceptions, it's no longer feasible to grow by just doing the same thing over and over again. You've got to have technological progress so that each time you're investing, there's some improvement whether it be improvement in organization, whether it be some improvement in machinery, whether it be some improvement in skills. In a reasonable point I've made over in the economy, a reliance and extensive investment is the path to what I call the miserizing growth. And what's the miserizing growth? That is more and more economic activity with lower and lower incomes. So let me give you an example. You understand where I'm going? Good, I wish I did. Okay. So here's a factory I worked with in the Dominican Republic in the early 1990s. They had a contract, I believe it was in Levy Straus, January 1990, making 9,000 genes for $2.18 a gene. Nine months later, the contract was renegotiated, no longer 9,000 genes, we'll do 5,000 genes a month. You remember $2.18, we can't afford that anymore, we'll pay you $2.05. Four months later, or two months later, sorry, you remember the 5,000 genes a week, we're only taking 3,000, we'll pay you $1.87. And 13 months after the arrangement was started, the factory was closed down immediately. Why? Because how many people in this room are not economists? Don't lie. Okay. So, what happened was, the World Bank and the IMF went to all the countries in the region and said, you know, Nicaragua, your wages are a bit high. We think you ought to devalue. So Nicaragua devalues, and the dollar cost of its wages falls. And then the fallacy of composition, the World Bank, the IMF, go around to Costa Rica and say, look at Nicaragua's wages out there. Pretty low, aren't they? You're not competitive, you better devalue. So Nicaragua developed, and they went to Mexico and said, look at Costa Rica and Nicaragua. Your wages are too high, you better devalue. So what was happening is that these firms were located in economies where the macroeconomic strategy was not around building capabilities, it was solely around the dollar cost of wages. So their only way of competing was to reduce the real standard of living, which is in miserizing growth. We found a factory in the Dominican Republic, which was assembling shoes. Everything was imported in the shoes that were being assembled, absolutely everything. The unit value area of those shoes was 22 US cents. It wasn't producing shoes at all. It had a footwear sector, but actually it wasn't manufacturing shoes. It was taking things out of boxes which had been imported, putting them in front of machines and just saying them together, putting them, wrapping them in paper which was imported, putting them in box which were imported, shipping them out again. There was no value added there, either in the firm itself or in the economy as a whole. So here we see a strategy of industrialization which is essentially a race to the bottom. And those economies in Central America were not unique. This, when China entered the world economy with cheap labor in the late 1980s and then when Eastern Europe entered the world economy, the global labor force doubled overnight. And the consequence was that manufacturing in which had always seen an increase in the prices of manufacturers because they were barriers to entry, manufacturing for the first time in living memory for many people saw a decline in its relative prices. And it wasn't the relative prices of all manufacturers. The percentage, this is a study I did many years ago of the likelihood of prices falling of products imported into Europe. You can see that the likelihood of prices falling in the context that previous graph was great with low technology products, living resource-based products because a high after technological spectrum we went, the lower the fall in unit prices. So that that historical assertion that manufacturing had high barriers to entry and was the source of sustainable incomes is open to question. It was historically true, but worth, and you'll talk about the advance of global value chains in the next set of discussion, when manufacturing began to be sliced up and spread around the world in ways which I'll talk about, it was no longer evident that manufacturing was benefiting across the board from barriers to entry. We can talk about that a bit later on. So I'm gonna move on to the second assertion. The first assertion is that sustainable income growth is no longer necessarily provided by the manufacturing sector. Manufacturing is a much more complex phenomenon than we used to see. Any questions? Terms of trade, as you know, turned against manufacturers between 2001 and 2014 because of the commodities boom. And no question about it. Now commodity prices have fallen and everybody's talking about the end of the terms of trade reversal, but manufacturing prices are falling as well. Read the Financial Times, look at the articles which are streaming out about overcapacity in many manufacturing sectors, what's happening to the price of manufacturers and capital goods in China and in other countries. So I wouldn't say the terms of trade are no longer against manufacturing, but we see a continued progression of falling price in many parts of manufacturing. So assertion number two, nuance is important, is this true across all of the manufacturing industry? And why is it that we have these circumstances in which the historical progression of high-manufactured prices was interrupted? And for that, I'm afraid, would you be surprised if I said I was gonna speak about global value change? We have to understand the nature of global value change. I guess most of you know about value change, do you? You know that it's made up of a series of activities. What happened was that over time, China, Dominican Republic, all those countries which were good at the physical transformation of products, entered this domain which was historically the domain of the rich countries and forced down the production. And so we had production moving from physical manufacturing to the disembodied and knowledge-intensive parts of design and the selling. And so we get a phenomenon which has seen to be deindustrialization in the North, but actually that's a misnomer, because in the world of 20 years ago, these parts were part of here. What's happened now is that the transnationals of this world have said, you know what to do now, Tony? That's now easy. So things which were formerly manufacturing are now in the service sector. I live in the South Coast, near a place called Worthing. The premium, or one of the premium world design studios for automobiles is in Worthing. It used to be part of Leyland Automobile Corporation, Rover Automobile Corporation, it used to be manufacturing. It's no longer manufacturing, it's now in the service sector. So with this breaking open of global value chains, many of the physical manufacturing parts of that chain have been stripped out of their skills, although many developing countries have high levels of skill, stripped out of their knowledge intensity, although many developing countries do have high levels of knowledge intensity, and the advanced companies say, we're not interested. So why should we do something which everybody else can do? We're going to concentrate on what they call their core competences. We're going to do the things that nobody else can do. It's called specialization and the division of labor. So the advance of global value change is really underlying that story which I've been telling in the previous assertion, which is the shipping out of things which were formerly manufacturing, which are relatively easy, which have low barriers of entry, opening that up to competition, and the value-added activities are now increasingly centered in the rich countries, and now also in some of the low and middle-income countries as well. Now, with this in mind, I'm going to talk about two different types of value change because they have different industrial policy consequences. You remember the point I'm making in this assertion that we need a nuanced and a very agated approach to industrial policy, and I want to show you all, depending on which type of global value change you're in, the policy implications will be rather different, bearing in mind that our overall objective is sustainable income growth and spreading the gains from industrial growth. Of course, we're getting competitive pressures in the server sector as well. So I'm going to talk about two value chains, what I call additive value chains, and what I call vertically specialized value chains. What are additive value chains? You'll recognize that, right? So for you, you might recognize it, sorry, which is the cocoa industry. You can see this is something which necessarily happens in sequence. You can't make cocoa thicker without first growing the beans, without first grinding the beans or whatever. So these are predominantly in the resource sector. They are chains where the different parts of that production chain cannot be done in parallel. I'll give you an example of parallel processing just now. They are necessarily additive in nature. And you'll find this right through the commodity sector in virtually all commodities, and some manufacturing firms choose to do it this way as well, but I don't have the time to talk about that. Vertically specialized chains are rather different. Anywhere on iPhone 4, okay? Sold in America 4, 495 dollars. You know the story, everybody? Sold in America 495 dollars. Export from China, 175 dollars. What was the value added in China for that iPhone? Those phones were made in China. In fact, if you go to your iPhone and you look at the back, it doesn't say made in China. It says assembled in China. In fact, these phones were made in China with components brought in from all over the world. The different parts of the iPhone manufacturer were done in parallel. They can be done anywhere. They can be shipped easily. And much of contemporary manufacturing, the clothing story I told you from Dominican Republic and other things, is essentially a story of this type of manufacturer. So if we, so if you look globally, more than two thirds of global trade is now in value chains, okay? Of that, the vertically specialized value chains comprise about 75% of world trade, but only 25% of Africa's trade and Latin America, incidentally. The additive, the resource sectors, dominate in Africa, but they only account for 25% of global value chains. So let me simplify what looks like being unnecessarily complicated. We've got increasing production being broken up and sent around the world. Should we ask these to be in the same industrial policy for different chains? I'm saying, you have to distinguish the industrial policy and the additive chains from the industrial policy in the vertically specialized chains. The vertically specialized chains are 75% of world trade. Now this is where we begin to run up against so-called industrial policy. In the vertically specialized trade, you want to deindustrialize. See, that's the traditional industrial policy. Slowly build your capabilities. Once you get into these global value chains, you see, there are many parts that which other people can do better than I am. I'm going to give things up if I was producing them in the past, and if I wasn't producing them in the past, it's not going to be my ambition to be everything. I'm just going to do narrow segments of those chains. And we go back to the question now about normal patterns of industrial. We go back to the question now about globalization, because it's not positioning between sectors which becomes important. It's what position you're going to have. Come back to this later on. Just before you go on. All trade. 75% or 72 thirds of all world trade is within value chains. If you want to, I'll tell you what the definition of that is. Two thirds of all world trade, is that what I said? Of all trade is in global value chains. Two thirds. Very important, because if you look at my phone, that screen is counted twice in world trade. It's an export from Korea to Korea's exports to China. And it's counted as part of China's exports to the rest of the world. So 28%, 30% of total world trade is counted twice. So the world trade organization, the World Bank, IMF, are all in a quantity. What do trade statistics mean? When we say that a country has exports of whatever it is, because many of those exports are almost entirely imported as well. So two thirds of world trade are in global value chains. Of that two thirds of world trade, 75% are in the vertically specialized trends. And the industrial policy in the vertical specialized change runs against that core agenda in industrial policy, which is to choose a sector and to deepen your industrial activity. Very powerful point. If you accept it, runs against one of the central tenets of traditional industrial policy. Now that's not the case for the additive value change. The additive value change in the resource sector is all around linkages. Hirschman said, one thing leads to another in the resource sector. You can use the resource sector by building linkages, vertical to suppliers, or sorry, vertical forward or backward to suppliers, or to users, or horizontal linkages. I won't bore you with the difference. In these additive value chains, you actually have a process where the share of value added in these chains goes up over time. And here industrial policy is to speed up the share of domestic linkages. And if you can, to move it into the core competences, I'm jumping various bits of discussion on the fragmented time, in moving to the areas which the transnational is already strong in, and if you screw it up, you can do wrong. But can you see the point I'm making about the additive value change is that this is a very different industrial strategy. In the additive value chains, it looks much more like traditional industrial policy. You may want to protect the inputs and produce your inputs locally. You may want to export, subsidize exports in the needs it does. You may want to target your infrastructure for these sectors. You may want to target your national systems innovation around particular sectors. So these are the sorts of instruments in traditional industrial policy. And what I'm saying is that for that part of production, which has also world markets in the case, this is a traditional industrial policy has considerable relevance. Only a quarter of world global value added chains is in this territory. For the three quarters that is not, you don't want to follow this agenda, you want to follow a different agenda. And that's where I want to move on to my next assertion. So can I round up the point I was making? If you want sustainable income growth, you've got to do things that other people can't do. Historically, that was manufacturing. When the big corporations in the world understood in the 1980s, it's called around specialization in poor competences, that actually they could get a lot of things go. A lot of the traditional manufacturing no longer was very attractive, you could get it done cheaper in China. Hang on to the knowledge creation parts of that story. They then shipped it out and we had this competitive process where countries were competing against each other through devaluation, through lowering wages, and we had this massive dispersion of manufacturing capability around the world. That was the first point I made about rents and barriers to entry. The second point I'm saying is that in some parts of the export sector, this means that you no longer, you no longer want to encourage industrial transformation as a deepening of your presence in a particular sector. You may want to target very, very narrow niches of that sector, very narrow niches and just do that part of the story. If you're in the commodity sector, you might want to do the traditional thing and commit yourself to a sector and deepen it in your sector. So, I'm gonna go into my third assertion. Any questions here? Like, sorry. Steel. Steel. So, who in their right mind would make steel now? There's massive overcapacity. Don't make steel. Think about it. So, one way into the steel industry is to deepen your presence and move into the primary inputs into the steel industry, the equipment to make the steel itself, to make the special steels and the products that make them steel. South Africa, for example, talks about beneficiation. We've got the raw materials, do everything. The other thing is to say, the physical transformation of iron or into steel, let the Chinese do it. What we'll do is we'll have the knowledge to make special steels. We'll sell the knowledge for the capital equipment. We will move out of that part of the chain, which is the relatively easy thing to do. I don't know whether I've quite captured your point. But I would say that's an example of where a modern industrial policy may want to say, I don't want to make steel anymore. I want to be elsewhere in that chain. Thinking of that chain, not just in making steel, but all the way from the knowledge and inputs which go into that steelmaking into the transformation in use of it. Any other questions? That later on. Remember, the agrarian stories, the story of commodities and linkages. But the idea of agriculture being a low technology and an undifferentiated product compared to manufacturing, which is high technology and differentiated, that's another thing that's gone. So Colotic Paris doesn't name anything to anybody here. Very influential Venezuelan theorist believes that it's in the differentiation of commodities that Latin American content has real possibilities. I only partly captured your question. I'll come to the part, say it wrong. Any other questions? Okay. I got more than questions, because of the qualification, because we are probably familiar with the study that my teams in production and innovation company, the fundamental research that we have been approaching those issue, those companies in China, in Germany, in the US, in the countries, as we basically are team, that means we decide to try to identify areas and tasks that are difficult to refuse for certain combination of resources in our beings. nazbih je vsak z klipskih ekonomijih, v ško ga razvijat. Veliko je stolika jen v 1980, da je bilo drugaj industriji. Zato so, da podrečajnjamo producent in generacij, izpevno ne bo občanjo nebo vse je, ne bo, da je prikravno, razmahne dezianje, in verno se vštih, kaj je odličljak. In imajo, da sem tega vse zelo načinja izveljala v veliko predaj, isneljno, je tudi. To vidim pa, da se možemo se dobrovali. Što se jaz naredijo v nekaj razdivljenju v svoju, a vzelo tudi vzelo na svoju, ki je tukaj, ki je vzelo vzelo na svoju, in kako je vzelo na svoju. Tukaj ne vzelo, kako je vzelo na svoju. Zelo tukaj tega je zelo. Kako jaz vsak bolj tukaj zelo na svoj, kako je vzelo na svoju, kako je vzelo na vzelo na svoj, kako je vzelo na svoj, kaj je po torej stranju. Kaj je što je začende... ...zegneesba o žešci in pravne družite sledosti, je, če se´s zelo, da bdeš pobrali za bolje indizibno prinaž 이, ...zokrati takimi insektačnih potkori. Na prinonen so pa v Samsun, ...mao nekaj ne bo ... ...reč o pravi modnije potkori. ne bo v svoj deli, kako se počer je učnjenja. Svoje, da je tko včinjevac načinjevac, je tko včinjevac načinjevac. Včinjevac načinjevac počer je, da je tko včinjevac in ne bo v čas, da je nebi včinjevac včinjevac, da je tko včinjevac, da je tko včinjevac načinjevac. To je svoj idej, ko je vzelo všeljno, včinjevac včinjevac, ...nistim, moj da se to prgela našem, zato je to bolj način, kot je bilo, da jih je tega mladke vših, in zato je bilo, da jih je mladke in mladke vših, kjer je to, da se je oložilo, povodila prejzavene. ...in nekako malo način, da je Antonias kako se tako pravno vših, da se je dobro vših, ali včetno, način je to, da je vših, način je to, da je to, da je povodila, skožitek v nekanje. Pojelitima je ovo, kot je lahko svojwalli menezda. Manezda vključ, ker sljätte, je pravzene necega pravzene, naši nekateri necega pravzene, sveinformationi inštačni. Vježivu, ki da me vsleda? Halsman...vale me nekative. ….Nakrva časje boh, dok pa ni sektu, kjer se objeraphi, stoljev prinac Angular thing gray materiality. Where countries which export one thing tend to export things around them. And that is essentially a story of capabilities. You develop a capability in assembling  μα v UD phones. You can use that to assemble in ..S DVs, something else. You develop a competence in design, flair of design for clothes, you can extend that to flair of design for furniture or flair of design for shoes. vse objevanie in vseh različno je, da je dobroča, da je dobroča, ki so stajnje objevanie, in da jih ima mnou, ko je vseh tako neče zelo, in učilje, da je ima način, da je to pravno 30, 40 rov način. Prvno je nekaj nekaj neče zelo, da je vseh različno iz odnega sektor, in drugi sektor. death. And moreover, this is the critical point, capabilities are dynamic, they change very rapidly. So to round off my third assertion that it is that your policy now is no longer around sectors in these Verantwortungized chains, it's around finding which niche you are in those sectors, which are the areas where relatively protectorate competition in nekaj kvalitičnih sektorov, kako se možemo pošličiti? Tako, izgledam, da bomo pošličiti in v Susaksi. Protočno pošličilo valične v Britej firmi, in Ion, kaj je v Britej firmi, vzgleda vši britej systemi, da ima se pošličit pošličit. In bom je se zelo, da smo nekaj vsezdučnji operator, vzelo, da se nekaj se vsezdučnje za vrštje. Kjer izvaj vsezdučnje vsezdučnje v Britiji? Vsezdučnje vsezdučnje vsezdučnje vsezdučnje vsezdučnje vsezdučnje. To je bilo separativna, ali zelo, da ima kvalitičnje vsezdučnje vsezdučnje vsezdučnje. In zato, da je Jeon kot je zelo pošličen, je to pošličen iz tvojih kapabilitih, ki je v vzniku vse, vzniku, vzniku, mekanizmu, s te kapabilitimi v zelo, vzniku, ki je... Počast, na drožu 3 je... Zato, ja. Zvuk je, da je pošličen iz procesu, prvi, pošličen, pošličen začin, da je pošličen iz assembiji, na vsočenju, pošli, na vrste, na pravdes. Počeli se nekaj došli v sva sequence, kaj pošli, nekaj pošli, nekaj pošli, nekaj pošli, nekaj pošli, nekaj pošli, nekaj pošli, nekaj pošli, nekaj pošli, nekaj pošli. In več zelo več, da je to še zelo, da neko všli v vsočenju, in več nekaj učinnih franča so pričo, kako je nog, da je najšlič, da je nog. Na različenstvene je izgledaj, ki je vznašel in vznašel in to je to, nače je vznašel. Iki je našličen, da ne bomo je našličen, ne bomo imeli, da je začinil posponu in da sem se vznašel na vznašel površen. Tako je, da je izgledaj, da je vznašel več vznašel tudi in Grinici je jazio veliko zelo v Kapa, If you wanted somewhere else, you couldn't run this twice as fast as that. Because we're in a world of rapid change. So development of capability at any point in time, that's not the capability, but what you want to develop, is the capacity to develop a capacity of capabilities. So you've lost a complex question, and I'm really trying to hang in there, Vsih neko je neč konča, je neč proroshke, nemoj del, neč proroh. Nič nistlinga, da te dobi svoj glas, pilkins in glas? Sa wiringo slišajte, če je constavno tudi, je neselj. Vsi bilo bodo pri goodskjih doma in neč oto vsi za njiž glas, in da ne jim slišajte. Vsi nekako se poključuje. Zajsa glas nekaj? Eye glass used to be made by just throwing molten glass on to the surface of the water. The man, who called Piliklar, was doing the washing up, his wife had got him to do it. He put the washing up liquid in the water in the sink. There's a lot of fat in the water. He noticed that transformation, all the fat went to the top of the water. He said, you know, I don't mean they glass that way. je vznik. Zato, da je tudi paten, in sej pretečno, však je vznik. Zato je tudi jezna, da je vznik, kaj je dnev počet, nekaj nekaj ne več. OK, priče, kaj tega vznik, ne nezakaj, priče, priče, priče, in revivalja ne nene uživljate, boš je zelo na prejzernosti skupna, nene nene uživljate, boš je zelo na prejzernosti skupna, ne snaske v деле, ne ne zelo na prejzernosti ne ne zelo na prejzernosti, še in dojel com, zwena se na prejzernosti, na zelo na prejzernosti. En enčat, krije sem izpakaj noga, je zaniminačno, da bi��štajno sektor vse obtukne se investigencie. Aga, da zaniminačno seworthom tezajne za sepranje, na vse koče vse obojo sega točne vse motorkarce, in sreč Mustosti in vse conjeb, na pritvoj, ko mi je nekajodilite v ngorboj motorkarce, ta je skupanje po vso skodilj, na vso skupanje, v sepranje, na vse tronem k polizoc, na njer svih tudi, je nekaj nekaj kompijen za industrije. Ok, različno, naredno je vštah. Nekaj različno je, ko je vršnje. Nekaj nekaj površnje industrije, je pri produktivnji sektor, ali je bilo, da je prijevni površnje, ki je prijevni tudi. Prijevni je predatri, ali prijevni je zelo, da je vršnje prijevni. Prijevni je, da je prijevni, prijevni je prijevni, in tudi, da sem priča, da se boš v rovnih razeljosti in iz nekaj prav, in tudi sem priča, da se ovo priča in tega je prav tudi. Tudi niko je nekaj prav, da so tako poživam, saj nekaj prav, ampak način, ki so poživati, in jo inčin se zač vančice vse včešljati, ovo je poživati, kaj je izteni, vse trajniti glasbenih meni v pravnih razeljosti in da sem nekaj pošločila na svojo vrštih. Vse vse zašto čalaj, when we are thinking about industrial policy, our type of productive sector policy, is to think about it in a rather different frame which I'll call inclusive industrialization. So income distribution is an important part of industrial orientation I was in Cuba last year, and I was just so overwhelmingly impressed by the Cuban investment in the meeting of health needs, politically, health needs. Cuban has a higher life expectancy than the USA. And it's better on almost every single health indicator than the USA outcome. We went to the research centre in Cuba which is developing really globaly inabitive solutions to things like diabetes, to skin cancer, to variety of other cases. We walked in and we had the presentation, the guy stands up and says great head of the research in z tkovimi ohledramatici kručutnimi v Ejafriku in pristit. In inovacijne meðjure tko včinje, je to več eštečno sedonati. Prejšmento. Višnev OKS, čeženje kapitalknowe smrede. Prišelj na tvoje, misl 계šnje, všim šeženje v Afričko, v South-Ejstko, in Kratnimi USA. Prišelj ne z kapitalknowe dece, ne praktitek ne. Vzupišnj nogo za površacje v Čina, Afrika, Šeško,тяk, Latina, Marika včešnje zdrav living from 2% in 2000, to 28% in 30% in 2015. Tukaj dozen je ez tudi vseh težavčnjem, z državka, Fitickih z težavča technologiji in srednih tež carrots, in kaj je to zelo to loveroving. Tako je nezavršen tudi, da težnje tehnologije je nezavršen, in da je težnje tehnologije z vrstej, kaj je optimične v zeločenih kraju, nekaj za različenje pripravdu, nekaj za različenje tehnologiji. In tukaj, in tukaj zeločenih kraju, nekaj nezavršen, kaj je težnje tehnologije in nezavršen, kaj je težnje tehnologije, v sej nabunjaj v verboj in svih makuokonomi, in nekaj kot je tukaj, kaj je zelo vzor. Včešlji je, da je tukaj, nekaj nekaj nekaj in nekaj nekaj zelo vzor, nekaj nekaj nekaj nespešnjeni zelo in zelo in zelo. Ptak je, prišta je, nekaj nekaj nekaj nekaj zapusti, nekaj nekaj zapusti s veček, nekaj nekaj nekaj zapusti s veček, in zapusti zelo in zelo. ... ... ... ... ... ... ... ... ...if they are not subject to the same fractures of financialization as the North, which is beginning to emerge in China. Subject that I think China and India can sustain their growth. I think small countries like Costa Rica, highly firm of small countries, can get there as well. I think for the bulk of other countries, for example, South Africa, Brazil and other countries. One there, one there is. In the central Taiwanese studies here in South Africa. Very, very strange. What I was very passive by was your population of the massive growth of 2% in the 20% of Chinese emissions. Of Chinese sources, of capitalists technologies in the North, into Africa, for example. That is a figure, which would actually outmatch that of the effect of Japan on the list. Back in 1978-1990, you can say that the mechanism of the list in Shanghai is huge export. Is there a possibility that this Chinese form of capital exporting, may in fact be a method of transporting your capabilities to those in countries. In other words, it is not a question just of China and India surviving in good central models. But in exporting so much capital goods, they are perhaps providing some of the weight with all. Or newer systems coming in, taking in their capital, to develop on the basis of capability production in that building. In China or in the recipient countries? In the recipient countries. In recipient countries. The bigger ones in the world. So we're just, according to the Specialist, you are the European German Electoral Research, on the first studies, which I think are, what is the developmental impact of technologies of capital goods coming from other developing countries. So we've got four studies. One is of woodworking machinery in Kenya. The other one is of power tillers in Tanzania, in Bryce. The third one is of sewing machines in Canada. There's no question about it. Who lost the question about it? In all areas. It's time for all women having access to those signals. Much worse environmental impact than the power tillers. And the hypothesis is that this will provide, counter to what I said to Robin, a possibility for the growth of small-scale capitalism. Because you've got lots of middle-income gap in the system. This is the middle. You've got a very informal set on the one hand. You've got a large, semi-advanced mother. And so what we're observing is the, we're in a state case involved in aid in inappropriate technology. So it will result both as appropriate small-scale tillers and large tractors. Soon as governments get involved, it's the tractors that get transferred. As a story, I would expect also, I don't know if you've found this, for there to be less need over an infrastructure around machinery. In the western model and the older models you were talking about, in which it doesn't cost a game, the whole factory of the machine was in place. Everything was shiny, everything was good. Now, I think, you know, in the roof of society, if the water needs to be clean, and the machines can be working favorably. That's one thing. The other thing is that the question of quality becomes a lot of theories I've mentioned. In the solidary environmental crisis we wanted a technological change. In the lower country we do see a different direction. And what we found in these sectors in Africa is that there are skills in the structure. That's a story of that. The results, I think, I mean, 2% to 28% in the under-the-radar slipping of public policy. This is not trivial. And we know that these technologies are qualitatively different. So I think that the argument is that in the first story, that this gives a different dynamic. It was one over there, then here, technical. Should we collect in our deep questions so that we can answer more the questions we have here. Yes, I think I might understand what this tells us, because I give you your left right. So, in one of our weeks in New York, by last April, in 100% there's second one, the answer, the Global Variage Act. You know in the Global Variage Act the structure of the voucher then, where to ask, is the bearer seat coordinated? The infom. The infom's footage in the Butterbirds inform is Dostaj izgleda velika koncentručnja vkonek. Svej sestimi vkonek je, da jih se koristivo, kater je v ispravih imelje zamoj. V ekorapuga vizikaj in notedo je, da je vzvega, da začne je. Svej, in nekakva vizika, da se deluje, je vzvega, kako je u muselmi, ki to vizuli, mogu staviti. Vizikaj je, zda so bilo, da vizike pozavoril in je naprekljo v zelo, In ne when we're talking about inclusive growth like this, do we require as much or different types of governance as not? Is the coordination as important? To nekaj stori? What I can only tell you story from Africa of these capital goods we're to be writing out in a moment? Is it that they not like? These are modern relationships are part of the governance structure. meneš gì v Rosentheni. Rosenthenki dokument where the fact that after the Second World War only three four countries were able to produce export machine tools, right? If you look at the same, I've been tracking information about, we still use machines and export them. Now in the moment the US was one of the countries able to produce machine tools in that time, now it's important, that is machine tools. So you have certain type of production technologies that in a sense seems to be good indicators of where their production capacity is really going, ...zapravljali zelo, da je to vse. So, here's the story. What we've seen, because many of the government channels in this matter, in consumer meetings, are met by standards, has to been a training organisation and GAT, attacked government culture, was unregulated, regulation from the state to the other side. So, many sectors are trained and regulated by standards, and we know about it now. This is FSE, the process of settlement of the answer. On the cell products which are FSE certified, you can have standards which go all the way through the chain, not just for making a referral, not just the lineages that are used, the way in which the goods are cut, the way in which the goods are bought. You can't countries that are in similar ways. You can't get FSE certification, you can't get FSE certification after a society standard in the food industry, which is very, very bad. What that has done is that it happens in the government industry by poor produce, can be certified. So, what we found very interesting is that, you say, what happens to the market shifts from the north to the south, since the standards are predominantly driven by hind and consumers, you have the money to pay for, you have the money to pay for, what happens then, hind and consumers, the answer is, standards intensity falls dramatically, where this falls, later standards fall, so insofar as the world economy in the last five, six years is ruled by the market and the south of the market and the north, in case that is sustained as a global manager, you'll find a lot of literature in the world of heavy chains working, and all this science show that with other technologies of heavy chains, the global standards of those heavy chains change the scene. Link into the story of the trading capital companies and you begin to get a trajectory to accumulation, which is rather driven when the world is pulled by the south, compared to when it's pulled by the north. This is not a story. There should be inclusive aspects to be going more towards an evolutionary innovation process, so basically try to innovate on something that's already there, to make it better for the companies, or a revolutionary innovation process, try to aim for something that can change the paradigm that should operate. This is essentially technology. Precisely, this is heavy Part of that is the rule of a natural state of the earth. Looking at the world economy from the outside, there is a track of time that gives something like a hundred more to... It's probably this, yes, and the check of how they go in the digital economies. The two others were, as you might have guessed, Taiwan and Korea. What, China? No, no, 50% of the time was spent in China's way below... Obviously, they've now got 50%. Yes, in those 40 years, from 1970 to 2010. The point is that you're emphasizing all the possibilities, you get your capabilities right, you don't use traditional industrial policy, that's our data, but you do do this, and you can grow. As it goes, if you do have to look, there is a very strong that the opportunities that you think has fairly hoped to arrive in the most developing countries as a court, they're not able to do that. Yes, they are. In the 50 years is the era in which I conference largely because of the embargo. That overwhelming the number one economic objective in using other kinds of measures of progress, that I think is really fundamentally... Can I apologize? There's just been so much trouble, and I hope that the centrality of industrial policy, complex story, is just because moving within the center is important, and secondly, you may want to actually free up your trade, and fill out the role of enterprise. That's nothing. On the 29th of February we'll have another talk, jointly organized with NECA and we're going to have a June Chang and other colleagues working on industrial policy, smart industrial policy in Africa.