How globalisation impacted Israel and India differently in the 1990s

In both Israel and India the globalisation process of the 1990s led to the development of advanced domestic industry. This article sketches the socioeconomic impact of this development in the two countries. The analysis suggests that the unique comparative advantage of each of these countries underlies the differences in the form of development and its social impact. Where the relative advantage consisted of innovativeness (Israel), globalisation led to development of an advanced industry focusing on research and development centres and local start-up companies. In contrast, where the relative advantage consisted of low labour costs (India), globalisation resulted in the development of an advanced industrial sector focusing on manufacturing and service centres.