European countries have gradually stopped manufacturing less sophisticated goods (clothing, shoes, etc.), which are now produced instead in developing countries, especially in Asia. The latter have shot ahead: total manufacturing output in the Euro zone grew by 13% between 1991 and 2003, whereas it grew by between 50% and 450% in the developing economies of Asia and Central Europe. The countries of Western Europe are therefore seriously threatened by this growth - how are they reacting?
Patrick Artus examines four cases here: Germany, France, the United Kingdom and Spain. The first two specialize mainly in the manufacture of machinery, the other two in nothing in particular. After analysing the trade balance of each country and the structure of employment by sector, Artus argues that Germany has maintained a high level of productivity growth, by contrast with France and Spain, where productivity has declined, unlike the United Kingdom.
This reveals two contrasting approaches, Patrick Artus concludes: one favouring short-term growth (Spain) as against one where the specialization strategy allows improvements in productivity that lead to economic growth over the longer term (Germany, UK).