Dani Rodrik · VoxDev · 21 May 2026 interview
Dani Rodrik on the end of the manufacturing escalatorManufacturing no longer works as a growth escalator; services-led growth with AI-augmented less-skilled workers is the realistic, slower alternative.
Will developing countries gain access to cheap expertise, or lose the low-cost-labor development path that supported earlier industrialization?
The IMF finds advanced economies more exposed but better positioned to benefit. The deeper worry: AI may pull up the export-led development ladder just as the largest-ever cohort of young workers reaches it.
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The development question got institutional: the World Bank made AI-and-development its 2026 flagship theme, the IMF found emerging markets generating new-skill demand at half the advanced-economy rate, and Rodrik declared the manufacturing escalator finished — with a Gabonese minister arguing the greatest risk is joining the AI wave too early.
Manufacturing no longer works as a growth escalator; services-led growth with AI-augmented less-skilled workers is the realistic, slower alternative.
Predictive and generative AI might dampen prospects of developing countries exporting back-office services.
The flagship report framed around whether AI closes expertise gaps or erodes the services-export path.
Emerging markets generate new-skill demand at about half the advanced-economy rate, with 8–9 month adoption lags.
The greatest risk is not missing the AI revolution, but joining it too early.
Gabon's digital economy minister: premature automation parallels premature deindustrialization; sequence data governance and infrastructure first.
Cross-country inequalities widen as advanced economies capture a disproportionate share of AI-related gains.
Scenario exercise: capital outflows from developing economies and reshoring erode export-led growth models.