Industries without Smokestacks and Structural Transformation in Africa

2018 ◽  
pp. 1-26
Author(s):  
Richard Newfarmer ◽  
John Page ◽  
Finn Tarp
Keyword(s):  
Structural Transformation ◽  
Low Income ◽  
Economies Of Scale ◽  
Low Income Countries ◽  
High Productivity ◽  
Emerging Industries ◽  
Unskilled Workers ◽  
Key Driver ◽  
Traditional Manufacturing ◽  
Manufacturing Growth

An early stylized fact of development economics is that low-income countries have large differences in output per worker across sectors, and the movement of workers from low- to high-productivity sectors—structural transformation—is a key driver of growth. Historically, manufacturing has been the key driver of structural transformation. It can employ large numbers of unskilled workers, is capable of productivity gains and produces tradeable products allowing economies of scale and specialization. But manufacturing growth in Africa has lagged behind other regions, leading some observers to question Africa’s ability to catch up. This view overlooks such emerging industries as ICT, tourism, food processing, horticulture, and new services exports, which share many characteristics with manufacturing. These “industries without smokestacks” are beginning to propel growth in Africa much as traditional manufacturing did in other, fast growing regions.

scholarly journals Industries without Smokestacks

2018 ◽  
Keyword(s):  
East Asia ◽  
Structural Transformation ◽  
Low Income ◽  
Economies Of Scale ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Advanced Economy ◽  
High Productivity ◽  
Average Share ◽  
Sub Saharan

Structural transformation in Africa has become a hot topic. One of the earliest stylized facts of development economics is that low-income countries have large differences in output per worker across sectors, and movement of workers from low- to high-productivity sectors—structural transformation is a key driver of economic growth. Between 1950 and 2006, about half of the catch-up by developing countries—led by East Asia—to advanced economy productivity levels was due to rising productivity within manufacturing combined with structural transformation out of agriculture. Manufacturing has the capacity to employ large numbers of unskilled workers, is capable of large productivity gains through innovation, and entails tradeable products that permit economies of scale and specialization. But manufacturing in Africa, rather than leading growth, has typically been a lagging sector. In 2014, the average share of manufacturing in GDP in sub-Saharan Africa hovered around 10 per cent, unchanged from the 1970s, leading some observers to be pessimistic about Africa’s potential to catch the wave of sustained rapid growth and rising incomes. This book challenges that view. It argues that other activities sharing the characteristics of manufacturing—including tourism, ICT, and other services as well as food processing and horticulture—are beginning to play a role analogous to the role that manufacturing played in East Asia. This reflects not only changes in the global organization of industries since the early era of rapid East Asian growth, but also advantages unique to Africa. These ‘industries without smokestacks’ offer new opportunities for Africa to grow in coming decades.

Sustaining Long-Run Growth and Macroeconomic Stability in Low-Income Countries—The Role of Structural Transformation and Diversification

Policy Papers ◽  
2014 ◽  
Vol 2014 (38) ◽  
Author(s):  
Keyword(s):  
Structural Transformation ◽  
Low Income ◽  
Low Income Countries ◽  
Macroeconomic Performance ◽  
Export Structure ◽  
Long Run ◽  
Trading Partners ◽  
Per Capita

Diversification and structural transformation play important roles in influencing the macroeconomic performance of low-income countries (LICs). Increases in income per capita at early stages of development are typically accompanied by a transformation in a country’s production and export structure. This can include diversification into new products and trading partners as well as increases in the quality of existing products.

Turbulence and Order in Economic Development

2018 ◽  
Author(s):  
Hazel Gray
Keyword(s):  
Economic Development ◽  
Low Income ◽  
Poverty Reduction ◽  
Private Property ◽  
Economic Transformation ◽  
Low Income Countries ◽  
State Institutions ◽  
Role Of The State ◽  
Manufacturing Growth

The terms of debate on the role of institutions in economic development are changing. Stable market institutions, in particular secure private property rights and democratically accountable governments that uphold the rule of law, are widely seen to be a prerequisite for economic transformation in low-income countries. Yet over the last thirty years, economic growth and structural transformation has surged forward in a range of countries where market and state institutions have differed from these ideals, as well as from each other. This book studies the role of the state in economic transformation in two such countries, Tanzania and Vietnam. These were two of the poorest countries in the world in the early 1980s but, over the last thirty years, both have experienced significant changes in the pace and character of economic development. While both countries experienced faster rates of GDP growth, their paths of economic transformation were very different. Vietnam experienced rapid manufacturing growth and poverty reduction while Tanzania’s path of economic change was characterized by the rise of mining and a much slower pace of poverty reduction. Employing a political settlements approach, this book argues that their paths of economic transformation were mediated by the lasting influence of differences in the institutions and distributions of power that had been forged during the socialist period. The comparison generates new insights into the variable relationship between political order and economic outcomes.

scholarly journals Structural Transformation Path Across Countries: Is It Systematic Pattern

2021 ◽  
Author(s):  
Altaf Hussain Padder ◽  
B Mathavan
Keyword(s):  
Structural Transformation ◽  
Low Income ◽  
Service Sector ◽  
Developed Countries ◽  
Industrial Sector ◽  
Low Income Countries ◽  
Economic Sectors ◽  
Middle Income ◽  
Sectoral Output ◽  
The Developed Countries

Abstract The structural transformation across the economic sectors is one of the prominent features that go together with economic development. The paper scrutinizes whether developing and low-income countries follow the similar path and pattern of structural transformation by which the developed countries are following or followed this threshold and are now experiencing a shift from the industrial sector to the service sector. The structural transformation paths of developed countries are almost identical, but the pattern of sectoral output shares varies from that of developing countries. The research reveals a fascinating finding i.e., low-income countries outperform middle-income countries and some major countries in terms of the pace of structural transformation from agriculture to service sector.

The View from Hyderabad

2017 ◽  
Author(s):  
Murphy Halliburton
Keyword(s):  
Pharmaceutical Industry ◽  
Research And Development ◽  
Low Income ◽  
Economies Of Scale ◽  
Multinational Companies ◽  
Low Income Countries ◽  
Cancer Drug ◽  
Medical Problems ◽  
New Research ◽  
Pharmaceutical Production

The boom town of Hyderabad is the center of India’s pharmaceutical industry, and this was where I met with representatives from two Indian pharmaceutical companies to discuss topics such as economies of scale in pharmaceutical production—the special capacity of the Indian pharma sector—licenses with foreign multinationals such as Gilead and prospects for new research and development. This chapter argues that those who anticipate a simple takeover by “multinational” companies of “Indian” companies, which are in fact also multinational, simplify what are complex and surprising emergences negotiated by quite powerful India-based corporate actors. The chapter also examines the first two patented drugs developed in India under the new patent regime, an anti-malarial medication and a cancer drug, and considers whether new research by Indian companies will focus on medical problems affecting low income countries or on products for high income markets.

scholarly journals The effects of regional economic integration in Europe of the pattern north-north and north-south

2007 ◽  
Vol 52 (174-175) ◽  
pp. 168-185
Author(s):  
Miroslav Antevski
Keyword(s):  
Economic Integration ◽  
Low Income ◽  
Economies Of Scale ◽  
Knowledge Spillovers ◽  
Low Income Countries ◽  
Regional Economic Integration ◽  
Transport Costs ◽  
Regional Economic ◽  
Factor Endowments ◽  
The North

This paper examines the effects of regional economic integration in Europe, especially the North-North and North-South integration patterns, and how the benefits and costs of integration are divided between countries. Outcomes depend on: comparative advantages, factor endowments, factor intensities, competitive advantages, FDI flows, transfers of technology, knowledge spillovers, economies of scale, transport costs, industry/GDP ratios, and agglomeration forces. The North-North integration between high income countries tends to lead to convergence of country incomes. Contrary, the South-South integration between low income countries causes divergence. Low income countries are likely to be better served by the North-South integration.

Structural Transformation vs. Environmental Quality: The Experience of the Low-income countries in Sub Saharan Africa

2020 ◽  
Author(s):  
Atif Awad
Keyword(s):  
Sustainable Development ◽  
Structural Transformation ◽  
Environmental Quality ◽  
Low Income ◽  
Panel Data Analysis ◽  
Industrial Sector ◽  
Sub Saharan Africa ◽  
Low Income Countries ◽  
Environment Quality ◽  
Sub Saharan

Abstract Structural transformation has been recognized as a critical mechanism for improving living standards for developing countries in Africa. However, the growing evidence indicates that such change is associated with considerable damage to the environment quality and, hence, challenging sustainable development. The present study investigates industrialization's influence on the environment quality for 20 low-income countries in Sub-Saharan Africa during 1980-2018. We employed two measurements for environmental quality, which are CO2 and nitrous dioxide emissions. Likewise, the study applied the Fully modified OLS and the Dynamic OLS as the most modern and suitable techniques related to the panel data analysis. Overall, the FMOL and DOLS results show that industrialization has an insignificant influence on environmental quality. The results also show that these countries' population size is the main driver for environmental quality changes. This finding implies that these countries should continue in their current efforts regarding promoting the industrial sector without wondering about sustainable development.

scholarly journals Industries without Smokestacks

2018 ◽  
pp. 170-190
Author(s):  
Mulu Gebreeyesus
Keyword(s):  
Economic Growth ◽  
Structural Transformation ◽  
Low Income ◽  
Manufacturing Sector ◽  
Low Income Countries ◽  
Unique Role ◽  
Tourist Attractions ◽  
Current State

Although the manufacturing sector is known to have a unique role in structural transformation, the industries without smokestacks that include tradable services (e.g. IT, tourism, and transport), horticulture, and agro-industry can provide new opportunities for export development in low-income countries and in turn drive economic growth. With vast natural and man-made tourist attractions and diversified agroecological advantage, Ethiopia is particularly well positioned to exploit the opportunities in industries without smokestacks. This study takes the case of Ethiopia and examines the current state and contribution of the industries without smokestacks to the economy and exports with the aim of improving our understanding of the major bottlenecks and solutions to unlocking the potential of these industries. It gives special attention to the horticulture and tourism industries, given the huge unexploited potential of these sectors in Ethiopia.

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