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http://www.imf.org/external/pubs/ft/issues10/

I’ll comment briefly:

With the industrial revolution, the trading areas of the world tended to specialize according to the following pattern:

(A) the more advanced economies specialized in manufacturing and
(B) the less advanced economies in minerals, agriculture, ranching, forestry and fishing

By the late 20th century, the global economy could no longer be adequately described by more versus less developed countries.

Nowadays, there are three different kinds of countries: high income countries (or, highly advanced economies), middle income countries and low income countries.

The middle income countries of today are about where the U.S. and U.K. were around 1900, while we are at a much higher level of income (albeit a level of income that is under stress because of creeping socialism).

As a result, we have a more complex pattern of trade in the world.

(A) high income countries tend to specialize in knowledge-based services and high-wage manufacturing (where items such as farm equipment and airplanes are made one at a time by teams of workers heavy in mechanics and engineers)
(B) middle income countries in low-wage, assembly ling manufacturing and
(C) low income countries in mining, agriculture, etc.

To get an idea of the impact of the relocation of assembly line production, consider what happened in New England from the late 19th century to the early 20th century, when the textile industry relocated to the southern states.

New England wasn’t made poor by this relocation, although many workers of the region found themselves challenged by the disappearance of the jobs they had. Rather, New England moved to a higher level of income, as did the Southern states to which the textile industry relocated.

So, while the transition is difficult, and we should always be mindful of this, the effect are, in net, beneficial to each of the regions or countries involved and, in the long-run, everybody is better off.