Manufacturing

The process by which materials are transformed into intermediate and finished products. Two inputs, labor and capital, are instrumental to the transformation process. As such, manufacturing encompasses labor- and capital-intensive goods (handicrafts and high-tech goods) when the expression is used generically.

Disparities in endowment and colonialism have made manufacturing an integral aspect of international exchange. Labor-intensive countries export their raw materials or cash crops to much more industrialized countries for further processing or industrial production.

Fabrication (a process through which chips or electronic devices are created by photographic and chemical processes) and the transformation of raw materials into intermediate or finished products are closely representative of the modern usage of the concept.

In advanced economies, manufacturing is associated with engineering and industrial design, which produces cars, airplanes, tires, and steel and steel-related products. Some Southeast Asian countries, such as Taiwan and Singapore, unlike some former colonial countries of Africa and Latin America, were able to successfully use [Page 304]manufacturing as an export-oriented growth strategy to foster growth and development.