A World of Rust Belts?: Deindustrialisation and its Impacts in Cities in the Global South

Lead Research Organisation: University of Manchester
Department Name: Environment, Education and Development

Abstract

The election of Donald Trump and Brexit signal a demand among voters in the North Atlantic for the reversal of three decades of economic, cultural and political integration. Discontent with globalisation is fuelled by the deeply-rooted popular narrative that the "new international division of labour" - as outlined by Folker Fröbel and colleagues in 1980 - has resulted in the offshoring of well-paying factory jobs from the industrial heartlands of the OECD to developing countries. This research project seeks to enrich our understanding of the economic and urban geography of contemporary globalization by troubling this narrative of the rise of BRICS and other 'emerging' countries at the expense of jobs and industry in the global North. It will document deindustrialisation in South Asia, Sub-Saharan Africa and Latin America, and inform a nuanced understanding of the new international geography of deindustrialisation.

The 'alter-globalization' movement reached its zenith at the 'battle of Seattle' at the 1999 World Trade Organization Ministerial Conference. The movement's participants were diverse, but one common refrain was that in a liberalised global economy producers in developing countries would struggle to compete against lead-firms in the OECD. However, a consequence of trade liberalization that activists failed to anticipate was the rapid expansion of South-South trade. A 2015 report published by UNCTAD entitled 'Global Value Chains and South-South Trade' shows that from 1990-2010 South-South trade increased ~15% annually and the majority of intra-South trade originates in East Asia. As a result of exposure to competition from East Asia, local industry in many cities in South Asia, Sub-Saharan Africa and Latin America has been in severe decline (Rodrik 2016). Economist Dani Rodrik terms deindustrialisation in developing countries 'premature' because in contrast to the pattern observed in the OECD, it has taken place prior to a shift from manufacturing to service-sector led growth, and he shows it has been more severe than deindustrialisation in advanced-industrialised countries such as the US and UK. This proposed research is the first comparative research project on deindustrialisation in the global South situated at the urban scale. It will focus on three cities where deindustrialisation has manifest itself differently - Kanpur, India; Dar es Salaam, Tanzania; and Buenos Aires, Argentina - and it will focus on three themes in each city.

1. Urban/regional planning and development - This will focus on the ways in which policy makers problematised deindustrialisation, and whether/how they sought to address it. In some cases they may have tried to protect domestic industry/labourers, while in other cases they may have simply sought to mitigate its impacts. This will be informed by policy documents and interviews with past and present government officials.

2. Business strategy, industrial policy and innovation - Strategies that allowed certain industries/firms to remain operational in each city will be identified. Possibilities include reducing labour costs, investing in technology and enhancing productivity, entering a joint venture with a more powerful firm, and/or subcontracting to informal sector producers. It will also evaluate whether policies that sought to assist domestic firms were successful. This will be informed by interviews with representatives of companies and industry groups.

3. Social welfare - This segment of the research determines the impact of deindustrialisation on labourers and documents their responses. It focuses on the ways labourers have adapted to changing labour markets (eg retraining or shifting to informal-sector activity), and it pays particular attention to the ways women and men have been affected differently (eg women's participation in the informal economy may have increased as the factory jobs available to men have disappeared).

Planned Impact

This research strives to make demonstrable academic, societal and economic impacts. It will foster knowledge exchange with policy makers at multiple scales and other relevant stakeholders throughout the project. The research design will be co-produced with officials at the United Nations Environment Programme. This will allow UNEP officials to outline their needs, and influence the design - particularly of interview protocols - to ensure that the results inform their ongoing activities. This will take place at an initial workshop within the first three months of its commencement at the UNEP headquarters in Paris, and I will send policy briefs to UNEP officials as they are produced. Finally, I will return to the UNEP headquarters to present the findings of research and policy recommendations within the final three months of the project. This engagement will allow UNEP to assist in the dissemination of findings to its partner institutions throughout its extensive knowledge network, and it builds on my existing relationship with UNEP. I have participated in advisory board meetings of the UNEP's Global Initiative for Resource Efficient Cities at UN Habitat meetings in Mexico and Ecuador. Furthermore, UNEP invited me to deliver a keynote address at the Asia Pacific Urban Forum in 2015 in Indonesia. Finally, I recently edited a themed section of articles on the UN Habitat's New Urban Agenda for the International Development Planning Review, and the section included an article authored by the Deputy Head of the Secretariat of the Climate and Clean Air Coalition (UNEP), Martina Otto, and Sharon Gil, a Programme Officer (UNEP).
Within the first three months of the research project's commencement the Co-Is will approach their existing contacts within national and municipal governments, industry and civil society, to solicit their input and obtain a better understanding of their particular needs (e.g. what aspects of deindustrialisation remain unknown and/or particularly vexing?):
-India: Ministry of Housing and Urban Affairs, Kanpur Municipal Corporation, State Government of Uttar Pradesh
-Tanzania: Dar es Salaam City Council and the Ministry of Industry and Trade
-Argentina: Ministry of Production and the Buenos Aires Strategic Planning Council
A number of city-specific questions will be included in the surveys on the basis of these consultations. These and other key stakeholders from industry and civil society will be invited to a workshop during the last two weeks of research in each city. The PI and Co-Is will present preliminary findings and distribute policy briefs with in-depth recommendations for urban planning, industrial policy, business strategy and social welfare. If policy makers follow-up and express interest in implementing any of the recommendations the PI will apply for funds from the University of Manchester's impact acceleration account to invite them to the final workshop. This will solidify a channel for knowledge exchange, and provide opportunities for sustained future knowledge exchange and engagement.
This research has the potential to disrupt the widely-held belief that the global South has industrialised at the expense of well-paying factory jobs in the global North, which has undoubtedly fuelled right-wing populism in recent years. A range of strategies will be employed to influence public discourse. First, a public event will be hosted by the Manchester Urban Institute; previous events have been very well attended. Second, I will apply to organize an exhibition at the People's History Museum in Manchester. Previous exhibitions have focused on impacts of deindustrialisation in the UK, and this would show visitors how deindustrialisation impacts cities and workers around the world. Finally, I would author articles for outlets with which I have an existing relationship, such as Making It Magazine (the official magazine of UNIDO), and also pitch articles to editors at popular outlets such as The Guardian.
 
Description 1. Many cities and regions in the North Atlantic experienced deindustrialization in from 1990-2010. In this period, the leading industrial agglomerations were 'unbundled,' as production was offshored (e.g. the automobile sector in Detroit, and steel in Pittsburgh). In many instances, these were the leading, most productive industrial agglomerations in the respective sector, and that explains why manufacturing activity was offshored. In other words, it didn't make sense to offshore lagging or non-competitive industrial activity, so this means that the so-called 'winners' of globalization experienced deindustrialization in that period. The 'premature' deindustrialization currently taking place in developing countries is very different. Industries in many countries are unable to compete with the highly productive global value chains that emerged as a result of offshored industry from the North Atlantic in the 90s and 00s. Indeed, contemporary global value chains combine hi-tech production methods with low-cost labour, and industries in Tanzania (low-tech and low-cost labour) and Argentina (medium-levels of technology and labour cost) cannot compete. Thus, in this era of 'premature' deindustrialization, the so-called 'losers' deindustrialize.

2. Entrepreneurs seeks to salvage value from collapsing companies. In Tanzania, the search for profitable investment among owners of capital, led to a bubble in real estate. In the absence of profitable investment opportunities in industry, many capitalists invested in land and real estate, as did the national pension fund. This created a bubble in the property market, which has burst and as a result unfinished construction sites litter the city. Scholars have previously associated urbanization with industrialization, but in the 2000s they noticed that some cities were growing (in area and population) but there was scant industrial growth. This gave rise to questions surrounding urbanization with and without industrialization, and one of the underlying questions was whether cities can grow over a prolonged period if they lack an industrial base, and if so, what is the character of urbanization? These questions were particularly pertinent in developing countries, where it was clear that rapid urbanization was taking place while industrial growth was sluggish. The findings of this research force us to re-work the question, because it appears that investment in the built environment (e.g. real estate and land) is happening at the expense of investment in industry. In other words, the question is not whether there is urbanization without industrialization, but rather whether industrialization can occur with urbanization.

3. One of the primary fields in which deindustrialization is problematized in the US and EU is its environmental impact. A significant amount of effort is made, typically at public expense, to remediate abandoned industrial sites. This is the first step in reconverting land for usable and profitable purposes. I have conducted interviews with policy makers in Tanzania and Argentina, not a single individual has framed deindustrialization as an environmental issue. I have also not come across a single policy or document that does so. Thus, it is instead framed as an economic problem, and occasionally as a social problem, that can be addressed through industrial and land-use policies (eg zoning regulations and tax breaks).

4. As noted in point 3, policy makers frame deindustrialization as an economic issue, and they have sought to address it with spatialized industrial strategies. In the past, industrial policy tended to try and protect domestic firms and augment their competitiveness. However, many developing countries currently identify their lack of connectivity to global markets as a barrier inhibiting industrialization, which is commonly problematized as an 'infrastructure gap.' Thus, industrial policy has been spatialized in the sense that policy makers seek to build the infrastructure that will allow domestic firms to integrate with global markets. This explains why all three countries in this study - India, Tanzania and Argentina - have incorporated expansive spatial plans into their industrial policies. In the remainder of this project, it will be important to determine whether these policies have been effective, and how they have affected cities. One hypothesis is that infrastructure investments have indeed enhanced connectivity, but in contrast to expectations of policy makers, investors have shied away from investing in industry. Instead, investment has focused on land and real estate, with the expectation that it will increase in value as a result of enhanced connectivity. This is related to point 2 above - it seems that an unintended consequence of industrial policy designed to attract foreign investment in industry is in fact the encouragement of investment and speculation in land and real estate. Again, this raises regarding the relationship between urbanization and industrialization (see point 2 above) and it may mean that policy makers develop mechanisms designed to discourage or hinder investment in land and real estate.
Exploitation Route Discussions surrounding the environmental impacts of deindustrialization in cities in the global South are urgently required. I brought this to the attention of engineers at the School of Mechanical, Aerospace and Civil Engineering, at the University of Manchester. They research low-cost methods of soil remediation, and we successfully applied for a grant from an internal pump-priming fund to develop this method in collaboration with their colleagues in Nigeria. While the technical components of the application were far beyond my capacity, we pointed out that deindustrialization is a major problem in many Sub-Saharan African countries, and there is thus a need to develop and refine low-cost soil remediation technologies. The application was successful, and we had our first team meeting in February 2020. This research was unfortunately put on hold due to Covid-19.
Sectors Government, Democracy and Justice,Manufacturing, including Industrial Biotechology,Culture, Heritage, Museums and Collections

URL https://www.tandfonline.com/doi/full/10.1080/23792949.2020.1725393
 
Description GCRF Research Partner Development Pump Priming Grant, administered by the University of Manchester
Amount £54,117 (GBP)
Organisation University of Manchester 
Sector Academic/University
Country United Kingdom
Start 02/2020 
End 09/2020
 
Description Multi-Dimensional Impacts of Infrastructure Investment
Amount £8,040 (GBP)
Organisation University of Manchester 
Sector Academic/University
Country United Kingdom
Start 11/2020 
End 10/2021
 
Description What's new about the 'new' Cold War?: Infrastructure and the Sino-US rivalry in Africa
Amount £127,500 (GBP)
Organisation University of Toronto 
Sector Academic/University
Country Canada
Start 08/2021 
End 02/2025
 
Description Second Cold War - China's digital activities in the Global South 
Organisation National University of San Martin
Country Argentina 
Sector Academic/University 
PI Contribution I attended a workshop at the University of San Martin while I was in Buenos Aires. At that workshop I cultivated a partnership with Prof. Marcelo Saguier and Dr. Maximiliano Vila. I invited them to co-author a book chapter for an edited volume that I co-edited, and this is in press. Next, I participated in an initiative funded by the University of Manchester, for research on China's digital activities in the Global South. This is inseparable from production and industry. Dr. Vila is a formal collaborator on that project, and assuming he fulfils the activities that he proposed, he will be paid approximately £2000. The output is a research article that will appear in another special issue.
Collaborator Contribution Dr. Vila proposed to contribute a research article to a special issue, which Dr. Schindler is co-editing.
Impact There is a special issue in progress.
Start Year 2021
 
Description City Industries: International Research Network 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact The City Industries network is based in Germany and it brings together leading scholars from around the world to discuss urban studies. Its website states: "CityIndustries is an international research network which gathers scholars from different countries and disciplines, such as Social and Cultural Anthropology, Sociology, and Urban Planning. The network aims to investigate processes of urbanization and industrialization, and to better understand how these processes are related through space and time in terms of materialities, social practicies, mechanisms of knowledge production, symbolic meanings, and affective atmospheres."

I was invited to give a talk at the 2021 workshop series, and I reported on the findings of this research from Tanzania. It was a privilege and great opportunity to receive this invitation, although I am unaware of the impact that my presentation had.
Year(s) Of Engagement Activity 2021
URL https://cityindustries.org/workshop-series-2021
 
Description Conference attendance - the annual conference of DePOT (Deindustrialization and the Politics of our Times) 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact This was the annual conference of DePOT, and it was hosted in the Ruhr area (eg Bochum and Duisburg). It was attended by scholars and professionals. Scholars in attendance were from Europe, North and South America, while most policy makers in attendance were from Germany and involved with the management of the Ruhr region's industrial heritage.
Year(s) Of Engagement Activity 2022
URL https://deindustrialization.org/wp-content/uploads/2021/10/Preliminary-Program-for-2022-Ruhr-DePOT-c...
 
Description Invited lecture at Universidad del Salvador in Buenos Aires, Argentina 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Postgraduate students
Results and Impact This talk was organized by Prof. Alejandro Pelfini, and hosted at the Universidad del Salvador in Buenos Aires. It was entitled 'The Political Economy of US-China Rivalry: Geostrategic Decoupling, the Rise of the Infrastructure State and Prospects for Renewed Third Worldism.' The audience was approximately 25 people and consisted of academic staff and postgraduate students, all based at Universidad del Salvador. In the talk, I explained how deindustrialization is related to the US-China rivalry, and how contemporary geopolitical contestation is shaping global production networks.
Year(s) Of Engagement Activity 2022
 
Description Keynote address at a conference hosted by Technical University of Berlin 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Public/other audiences
Results and Impact The Duetsche Forschungsgemeinschaft funded a large research project on industrial policy and global value chains, and this was the final presentation, hosted by principal investigators Elke Beyer and Anke Hangemann. It was a public event hosted in Berlin, and I was invited as a keynote speaker.
Year(s) Of Engagement Activity 2019
URL https://www.youtube.com/watch?v=pIR21gU86Z8
 
Description Media engagement 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact This article about deindustrialization in Latin America and Sub-Saharan Africa was published by the International Growth Centre, whose readers include policy makers, professionals and scholars. As a result of this article I was contacted by a journalist from The Economist and I agreed to be interviewed.
Year(s) Of Engagement Activity 2018
URL https://www.theigc.org/blog/new-international-geography-deindustrialisation/
 
Description Multi-dimensional impacts of infrastructure project delivery 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact I appeared on a panel at the ESRC Festival of Social Science. It was targeted at UK policy makers, but my brief was to demonstrate that infrastructure construction is a global issue, and I showed that in many developing countries, it is a key component of contemporary industrial strategies and it is a response to persistent deindustrialization. It was organized by Richard Kirkham and speakers included policy makers and planners based in the UK, and Professor Anupam Nanda. The panel was open to the public, and attendees included industry professionals, policy makers and postgraduate students.

The panel included the following speakers:

• Terri Harrington and Emily Dawson (Highways England)
• Richard Kirkham (School of Engineering)
• Anupam Nanda (School of Education, Environment and Development)
• Seth Schindler (School of Education, Environment and Development)
• Fiona Spencer (Infrastructure and Projects Authority)
• Terry Williams (The University of Hull)
Year(s) Of Engagement Activity 2020
 
Description Online article 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Public/other audiences
Results and Impact This article sought to present some of the findings from one of the academic articles to the general public in an engaging manner.
Year(s) Of Engagement Activity 2023
URL http://blog.gdi.manchester.ac.uk/will-minting-messi-solve-argentinas-economic-crisis/
 
Description Online article for Developing Economics 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Media (as a channel to the public)
Results and Impact This was a co-authored article, with Ilias Alami and Nicholas Jepson, for Developing Economics entitled 'Who's in control? Wall Street Consensus, state capitalism, and spatialised industrial policy.'
Year(s) Of Engagement Activity 2022
URL https://developingeconomics.org/2022/07/11/whos-in-control-wall-street-consensus-state-capitalism-an...
 
Description Towards a Transnational Deindustrialization Studies 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Postgraduate students
Results and Impact This was a joint initiative hosted by Deindustrialization and the Politics of Our Times (DePOL), the Global Development Institute and the Manchester Urban Institute. Dr. Schindler co-organzied the initiative with Prof. Steven High, who chairs DePOL. DePOL is the leading network on deindustrializaiton studies worldwide, yet its members tend to focus on deindustrialization in the OECD. I reached out to colleagues who research deindustrialization in the Global South, and this workshop brought together these two groups.
Year(s) Of Engagement Activity 2021
URL https://deindustrialization.org/event/towards-a-global-deindustrialization-studies/