QUESTION #2)

A1) What is the typical economic growth path described as “modernization” for a developing country? How is it achieved? (You can discuss a particular country’s example).

The typical economic growth path described as “modernization” for developing countries presented by the article runs from agriculture through manufacturing and only later to services. As the author explained, the logic supporting the conventional path towards an advanced economy is straightforward and development typically involves moving workers from low-productivity activities such as farming to high-productivity sectors, as industry for instance. The Asian miracle followed this pattern, when cheap labour, raw goods, and lower business costs offered by Southeast Asia countries were key factor in attracting global capital and a shift from agriculture economic-based to manufacturing. However, “the Asian Miracle” faced a serious crisis in 1997 and interrupted the cycle. Nowadays, they started to enter on the service momentum.

A2) How is India’s growth apparently refuting usual trend?

India’s growth is going straight from agriculture to services, leapfrogging manufacturing, thanks to technology and outsourcing, which allows modern services such as software development, call centers and insurance claims, use skilled workers, exploit economies of scale and export those services worldwide.

Going deeper in this case, Ejaz Ghani (2010) explains that the growth experience of India and other South Asian countries suggests that a Service Revolution—rapid income growth, job creation, gender equality, and poverty reduction led by services—is now possible. The promise of the Service Revolution is that countries do not need to wait to get started with rapid development. There is a new boat that development latecomers can take. The globalization of service provides alternative