Globalization, Structural Change, and Technological Change in Emerging Economies

This chapter provides a critical overview on a series of issues that the relevant theoretical and empirical literature suggests being crucial in dealing with the challenges an emerging country may encounter in its attempts to reach a higher income status, with a particular focus devoted to the implications for the domestic labour market. The first part of the chapter focuses on structural change, capability building, and technological progress, mapping specific ways in which an emerging country can engage in successful catching-up, keeping in mind that developing countries are deeply involved in globalized markets where domestic innovation has to be complemented by the role played by international technology transfer. The chapter then deals with possible consequences of this catching-up in terms of employment and skills, contrasting the prescriptions of conventional trade theory with a view taking into account technology transfer, labour-saving technological progress, and skill-enhancing trade.