What is new international division of labor?

The New International Division of Labor (NIDL) is a concept developed in the 1970s by economists Peter Dicken and Manuel Castells to describe the changing patterns of global production and labor allocation.

Traditionally, industrial production was concentrated in the Global North (developed countries) where companies controlled all stages of production from manufacturing to distribution. However, with advancements in transportation, communication, and technology, there has been a shift towards a more global division of labor.

In the NIDL, different stages of production are now spread out across different countries. For example, manufacturing may take place in China, while design and marketing are done in the United States. This division of labor allows companies to take advantage of lower costs and access to specialized skills in different countries.

The NIDL has led to the rise of global supply chains, where products are assembled from components produced in different countries. This has increased interdependence among countries and made the global economy more interconnected.

Critics of the NIDL argue that it has led to job losses in developed countries as manufacturing has shifted to developing countries with lower labor costs. Others argue that it has led to increased economic growth and development in some developing countries.

Overall, the New International Division of Labor reflects the changing dynamics of the global economy and the increasing interconnectedness of countries through global trade and production networks.