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by Farhad Key
1

inexpensive human more other would use advanced less significant can case

With an abundance of low - priced ( ) labor relative to the United States , it is no surprise that China , India and developing countries specialize in the production of labor - intensive products . For similar reasons , the United States will specialize in the production of goods that are - and physical - capital intensive because of the relative abundance of a highly - educated labor force and technically sophisticated ( ) equipment in the United States .
This division of global production should yield higher global output of both types of goods than would be the if each country attempted to produce both of these goods itself . For example , the United States would produce more expensive labor - intensive goods because of its more expensive labor and the developing countries produce expensive human and physical capital - intensive goods because of their relative scarcity of these inputs . This logic implies that the United States is unlikely to be a global competitor in the production green technologies that are not relatively intensive in human and physical capital .
Nevertheless , during the early stages of the development of a new technology , the United States has a comparative advantage in the production of the products enabled by this innovation . However , once these technologies become well - understood and production processes are designed that make of less - skilled labor , production will migrate to countries with expensive labor .

 
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