The structure of supply chains and their implications for export supply *

Until the industrial revolution, growth rates in the global economy were low, and most economies functioned as relatively stable and locally based systems. Advances in technology changed this age-old structure, promoting a transition from the domestic to the global. New communication technologies increased the extent of the market, allowing for changing patterns of exchange, access to new customers and improvements in the prices of output (an economy's terms of trade), and access to new goods and services. “Loot” from overseas colonies provided the wherewithal to invest. And new production technologies provided the capacity to extend the division of labour and to improve productivity – in Adam Smith's phrase, “the division of labour depends on the extent of the market”.