The concept refers to the fact that the spread of markets and production processes worldwide has created a growing differentiation of economic activity resulting in the specialization of particular countries in distinct branches of production, whether this be in certain products, or in selected parts of the production process.

Whereas in orthodox economics the division of labor as such is seen as providing mutual benefit, alternative analyses of the New International Division of Labor stress the inequalities and structured hierarchies that it creates.

Picture Credit: www.nytimes.com

The concept was brought into general use by the work of Folker Fröbel, Jürgen Heinrichs and Otto Kreye in their book, The New International Division of Labour (1980).

Fröbel and his associates found that relocation of production to Third World countries was resulting from rising domestic costs, especially wage costs. Once some companies relocated overseas in order to source lower labor costs, competitive pressure on the remaining companies mounted to do likewise.

The New International Division of Labor has been facilitated by technical changes which have allowed the production process to be subdivided with different stages located in different places. The impact of this development on the Third World countries can be seen in terms of the emergence of a new working class, often mainly feminine, that works for lower wages and in inferior conditions.

Certain other studies have highlighted the fact that a significant proportion of industrial activity, and particularly its ecologically damaging and low-skill elements, are being shifted to intermediate and developing countries.

 Author: Stuti Das, India

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Reference:

• Scott, John, and Gordon Marshall. A Dictionary of Sociology. Oxford: Oxford University Press, 2009. Print.
• Jones, R. J. Barry. Routledge Encyclopedia of International Political Economy. New York: Routledge, 2001. Print.