The passage states that educational levels and technical skills are rising in…
2016
The passage states that educational levels and technical skills are rising in other countries. Why can the labour-based competitive advantages of India and Singapore not be sustained in the IT and service sectors?
Answer: C. Because of new competitors. — ConceptA labour-based competitive advantage exists when a country offers a comparatively skilled workforce at a lower cost. Such an advantage is temporary…
- A.
Due to diminishing levels of skill.
- B.
Due to capital-intensive technology making inroads.
- C.
Because of new competitors.
- D.
Because of shifting of labour-based advantage in manufacturing industries.
Show answer & explanation
Correct answer: C
Concept
A labour-based competitive advantage exists when a country offers a comparatively skilled workforce at a lower cost.
Such an advantage is temporary when other countries can develop a similarly educated and technically skilled workforce.
Application
The stem states that educational levels and technical skills are rising in other countries.
Those countries can therefore develop workforces comparable to those currently supporting IT and service activity in India and Singapore.
As more countries enter the same service markets with similar workforce capabilities, the existing labour-based advantage loses its exclusivity.
Cross-check and contrast
Diminishing skill levels would attribute the change to a decline in the existing workforce, which is not the premise supplied in the stem.
Capital-intensive technology would attribute the change to technological substitution for labour, which is not the premise supplied in the stem.
A shift in manufacturing advantage concerns goods-producing industries rather than the IT and service-sector premise supplied in the stem.
Result
Therefore, the labour-based advantage cannot be sustained because new competitors are emerging.