Technical change and international division of labor: international recomposition of productive processes and industrial relocation strategies.

Summary The purpose of this paper is to study the impact of the diffusion of the new technological paradigm (based on information technology) on international specialization and localization. Developed countries can regain their competitive advantages in labor-intensive and energy-intensive basic sectors. The resulting processes of reindustrialization and respecialization help to curb the trend toward delocalization to low-wage countries. Industrial relocation to the home country of multinational firms is accelerating in countries that are rapidly diffusing these new techniques. The gains from relocation can be offset by economies of variety and better adaptation to rapid fluctuations in demand. Sectoral analysis shows, however, that there are both decomposition movements in the productive processes of some sectors and opposite recomposition movements in others. An analysis in terms of the spectrum of techniques for a given good helps to explain these contradictory phenomena. All in all, the new international division of labor expected in the 1970s is limited for the developing countries, which are losing their advantages in terms of wage costs and availability of labor. The questioning of their advantages in the field of natural resources linked to the phenomena of substitution of new biotechnologies for raw materials is likely to set in motion a process of disconnection.