ABSTRACT
Ideally, we could create a simple road map for LA on the basis of the previous chapter, choosing the particular factors and route that made the most sense for the region and customized for each country. This chapter makes clear that the types of industries and sectors that a country is involved in have profound implications for its standards of living and equality. As we have discussed throughout the book, each industry has implications for types and levels of employment, revenue amounts from exports, and human capital investments needed for the production process. It is no accident of history that producers of unskilled labor goods or commodities are poor and those of high technology and high value-added manufactures rich. In fact, the theory of comparative advantage in economics, flawed as it is in neglecting the dynamic aspects of human capital development, says nothing in particular about the relative gains from trade; merely that trade increases overall world efficiency. The question confronting developing nations is therefore ultimately not just one of adopting an active EA style IP, but of selecting sectors in which they can earn more and employ more.
