Lights-Out Manufacturing and Foreign Direct Investment Decline: Human Resource-Based Avenues for Technological Diffusion in Developing Countries

Abstract

Abundant literature has developed on how foreign direct investment (FDI) affects host countries. The answer largely depends on whether FDI generates positive externalities (“spillovers”) for the host economy and extends backward links with the local economy. However, with the rise of lights-out manufacturing, cheap labour may become a less important factor for transnational corporations (TNCs) in their FDI decisions. As a result, FDI and its development impact (if there is any) are bound to diminish. Hence this chapter looks for human resource-based avenues for positive externality creation and technology diffusion in developing countries. © 2023, The Author(s), under exclusive license to Springer Nature Switzerland AG.