In order to see if an economy has entered a long-term path of dynamic development that will inevitably result in its transformation within a few years into a structurally sound and modern economy, we should establish and investigate whether this corresponds to reality by examining its production model for to find out if there is a problem or not.
This examination is achieved by investigating whether the economy in question presents a high or low percentage of its internationally tradable goods and services in terms of the total GDP it produces, taking into account the country’s income level.
Internationally tradable are the products and services whose prices are set at an international level and whose domestic producers must overcome these limitations in order to make them available on the market. That is, they should be internationally competitive. However, the situation is proven if we examine a more specific group of internationally tradable products and services, which are those products and services of high added value which, in order to be produced, require a partnership of highly specialized labor and capital, i.e. products that are produced using state-of-the-art technology methods and incorporate scientific knowledge .
These products which in fact primarily define the area of the “Fourth Industrial Revolution” we have named for the sake of descriptive convenience internationally tradable products of high added value. These goods come from a production that continuously integrates scientific and technological developments into the production process and steadily increases their productivity.
Then the specific goods must be investigated in relation to the per capita income of the country that produces them. In this case we will be able to see where the country ranks based on these specific internationally tradable goods which require organization, skills, human capital, entrepreneurship and scientific and technological research. A country’s strong manufacturing sector results in that sector’s share of GDP shrinking because its increased productivity is transferred in the form of higher wages to the stagnant, in terms of productivity, sector of internationally non-tradable goods and services.
