In economics the new international division of labor (NIDL) is an outcome of globalization. It is the spatial division of labour which occurs when the process of production is no longer confined to national economies. This has led to a trend of transference, or what is also known as the "global industrial shift", in which production processes are relocated from developed countries (the USA, Europe and Japan) to developing countries in Asia (for example China, Vietnam and India) and Latin America. This is because companies search for the cheapest locations to manufacture and assemble components, so low-cost labour-intensive parts of the manufacturing process are shifted to the developing world where costs are substantially lower. Companies do so by taking advantage of transportation and communications technology, as well as fragmentation and locational flexibility of production. From 1953 to the late 1990s, the industrialized economies' share of world manufacturing output declined from 95% to 77%, and the developing economies’ share more than quadrupled from 5% to 23%.
- ^ UNIDO (1986) World industry: a statistical review, 1985, Industry and Development, 18: Fig. 1; UNIDO database