Armed with these new services, industry can migrate to the remote corners of the
globe where costs are low and many more towns and cities in these areas are continuously
being drawn into the global trading system. Today trade growth in manufactures
is driven by exploiting differences in labour costs between regions, but it does not rely
exclusively on inter-country differences. Michael Porter’s model of world trade attributes
comparative advantage not only to local resources such as cheap labour, but also to
expertise. He argues that clusters of companies specializing in a particular item, say
ski boot clamps, develop a ‘comparative advantage’ in that product. With the right communications
and transport, these clusters can exploit their advantage globally, leading
to a broader trade matrix and improved global efficiency and trade growth even if wage
cost differences are eliminated.7 This process is dynamic. Once a particular company,
country or cluster has become an established product area, it is difficult for others to
build up sufficient volume of sales to break into that market. In the nineteenth century
Britain developed mechanized textile manufacturing, and for some years gained a
comparative advantage from this. Eventually other countries caught up. Today technical
advance is continuous. The manufacture of medical equipment, the production of a
particular type of rubber belt drive, and the manufacture of complex products such as
cruise ships and aircraft are all examples where one country has developed a competitive
advantage based on technical innovation and is protected by barriers such as the
high cost of entry. In the case of particular inventions the manufacturing rights may
even be covered by a patent.