Report
Patrick Artus

What makes the difference between countries where industry remains large and countries that are deindustrialising?

At a time when there is a lot of talk about reindustrialisation, we must try to understand its causes . We compare OECD countries while seeking to determine what explains the differences in the weight of industry in the economy or in the growth of industrial production. At first sight, the following may explain why some OECD countries remain industrial while others are deindustrialising: Labour costs; The degree of industrial modernisation and automation; Labour force skills, the quality of science education; The weight of certain taxes that hamper industry; Dutch disease (crowding-out of industry by services where the return on capital is high); Labour market flexibility (a high level of flexibility encourages companies to set up in the country). A comparison of OECD countries shows that the main causes of deindustrialisation are: Low skills (young people and adults); A high weight of distortionary taxes (social contributions and corporate production taxes).
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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