Deindustrialization (also spelleddeindustrialisation) is a process of social and economic change to a country's political economy in which there is the removal or reduction of industrial capacity or activity in a country or region, whereby durable goods production for export or domestic consumption, that is integrated both vertically and horizontally into the creation of finished goods that meet the full spectrum of demand, are systematically reduced across the full spectrum of finished goods by category; as well as from raw materials to final assembled products. It is an opposite of industrialization.
There are multiple interpretations of what this process is. Cairncross (1982) and Lever (1991) offer four possible definitions of deindustrialization:
A straightforward decline in the output of manufactured goods or in employment in the manufacturing sector. This, however, can be misleading because short-run or cyclical downturns may be misinterpreted as long-run deindustrialization
A shift from manufacturing to the service sectors, so that manufacturing has a lower share of total output or employment. This may also be misleading, however, as such a shift may occur even if manufacturing is growing in absolute terms
That manufactured goods comprise a declining share of external trade, so that there is a progressive failure to achieve a sufficient surplus of exports over imports to maintain an economy in external balance