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On Thursday, June 27, Richard Baldwin joined Markus’ Academy for a conversation on the Big Shift in Globalization. Richard Baldwin is a Professor of International Economics at IMD Business School. Introductory remarks by Markus Brunnermeier.
● A summary in three bullets
○ In the past we saw two big shifts in globalization. The first shift promoted trade in final goods, while the second promoted trade in intermediate manufacturing inputs. The coming third big shift will be about the growth of trade in services
○ China is the world’s sole manufacturing superpower. It has become so dominant that other countries have had little alternative than to shift towards exporting services
○ The recent rise of automation in manufacturing has reduced the importance of developing countries’ comparative advantage from low labor costs. To continue leveraging their comparative advantage, these countries should focus on exporting services
Timestamps:
[9:07] The third big shift in globalization
[30:57] There is no alternative to the service export-led growth model
[47:21] The future of trade is services
[1:02:32] The emerging market miracle will continue and will be based on services
[1:11:55] Will AI undermine the service- and export- based development model?