Abstract: How do differences in the local business environment influence location of industry within countries? How do the benefits of a good business environment compare with those from good market access and agglomeration economies from industry clustering? The authors examine these questions by analyzing location decisions of individual firms. Using data from a recently completed survey of manufacturing firms in India, they find that both the local business environment and agglomeration economies significantly influence business location choices across cities. In particular, excessive regulation of labor and of other industrial activities reduces the probability of a business locating in a city. The authors ' findings imply that in order to attract industrial activity, smaller or remoter cities need to offer even more attractive policy concessions or reforms to offset the effects of their relatively adverse (economic) geography. Their methodology pays special attention to the identification of agglomeration economies in the presence of unobserved sources of natural advantage.
Génératrice d’emplois et de productivité, l’industrialisation est un vecteur de croissance qui coïncide souvent avec l’accélération du développement dans les économies les plus avancées. Cela étant, du fait de la rapidité des avancées technologiques et des restructurations qu’a connues le commerce international, certains chercheurs et décideurs remettent aujourd’hui en cause les contributions de l’industrie manufacturière au développement dans les Etats où son apparition est tardive. Dans le même temps, l’industrialisation et les transformations structurelles font partie intégrante de l’Agenda 2063 de l’Union africaine et des stratégies de développement de nombreux pays d’Afrique sub-saharienne. A la lumière de ce regain d’intérêt pour l’industrialisation dans l’ensemble de la région, il importe moins de savoir si les pays d’Afrique sub-saharienne doivent considérer l’industrialisation comme l’une des voies vers la croissance durable que de promouvoir effi cacement les perspectives ouvertes par cette dernière. L’industrialisation en Afrique subsaharienne : Saisir les opportunités offertes par les chaînes de valeur mondiales se penche sur cette question en proposant de réévaluer les perspectives d’industrialisation des pays d’Afrique sub-saharienne au travers de leur intégration dans les chaînes de valeur mondiales et en examinant le rôle de la politiques dans le renforcement de ces perspectives.Les principaux enseignements de cette étude indiquent que • L’Afrique sub-saharienne n’a pas connu de désindustrialisation précoce; au contraire, la région a bénéfi cié d’une croissance substantielle de l’emploi manufacturier en dépit d’une contribution toujours limitée de la valeur ajoutée industrielle au PIB. • L’intégration de la région aux chaînes de valeur industrielles mondiales reste relativement élevée, bien qu’elle soit marquée par la présence dominante des produits primaires et par le recours à l’emploi peu qualifi é. • L’intégration aux chaînes de valeur mondiales conduit à des créations d’emplois et l’intégration verticale en amont permet d’en créer encore davantage. Le présent ouvrage souligne l’importance des politiques dans le maintien d’un marché compétitif, dans la promotion d’une hausse de la productivité, dans l’encouragement du développement des compétences et dans l’accompagnement de secteurs tels que les infrastructures et la fi nance. Les décideurs politiques peuvent renforcer les connections des chaînes de valeur mondiales 1) en augmentant la valeur ajoutée des produits d’export existants, 2) en encourageant la reconversion vers l’emploi hautement qualifi é et 3) en créant des avantages comparatifs pour les industries centrées sur les savoirs.
Industrialization drives the sustained growth in jobs and productivity that marks the developmental take-off of most developed economies. Yet, academics and policy makers have questioned the role of manufacturing in development for late industrializers, especially ith more job creation. Industrialization drives the sustained growth in jobs and productivity that marks the developmental take-off of most developed economies. Yet, academics and policy makers have questioned the role of manufacturing in development for late industrializers, especially in view of rapid advancements in technologies and restructuring of international trade.Concurrently, industrialization and structural transformation are integral to the African Union’s Agenda 2063 and the development strategies of several countries in Sub-Saharan Africa (SSA). Given this renewed interest in industrialization across the region, a central question is not whether SSA countries should pursue industrialization as a potential path to sustainable growth but how to promote the prospects of industrialization. Industrialization in Sub-Saharan Africa: Seizing Opportunities in Global Value Chains addresses this question by reassessing the prospects for industrialization in SSA countries through integration into global value chains. It also examines the role of policy in enhancing these prospects. The main findings indicate that • SSA has not experienced premature deindustrialization; the region has witnessed substantial growth in manufacturing jobs despite a lack of improvement in the contribution of manufacturing value-added to GDP. • The region’s integration into manufacturing global value chains is reasonably high but it is dominated by exports of primary products and engagement in low-skill tasks. • Global value chain integration has led to job growth, and backward integration is associated with more job creation. The report emphasizes the role of policy in maintaining a competitive market environment, promoting productivity growth, and investing in skills development and enabling sectors such as infrastructure and finance. Policy makers can strengthen the global value chain linkages by (1) increasing the value-added content of current exports, (2) upgrading into high-skill tasks, and (3) creating comparative advantages in knowledge-intensive industries.
Abstract: How do differences in the local business environment influence location of industry within countries? How do the benefits of a good business environment compare with those from good market access and agglomeration economies from industry clustering? The authors examine these questions by analyzing location decisions of individual firms. Using data from a recently completed survey of manufacturing firms in India, they find that both the local business environment and agglomeration economies significantly influence business location choices across cities. In particular, excessive regulation of labor and of other industrial activities reduces the probability of a business locating in a city. The authors ' findings imply that in order to attract industrial activity, smaller or remoter cities need to offer even more attractive policy concessions or reforms to offset the effects of their relatively adverse (economic) geography. Their methodology pays special attention to the identification of agglomeration economies in the presence of unobserved sources of natural advantage.
Industrialization drives the sustained growth in jobs and productivity that marks the developmental take-off of most developed economies. Yet, academics and policy makers have questioned the role of manufacturing in development for late industrializers, especially ith more job creation. Industrialization drives the sustained growth in jobs and productivity that marks the developmental take-off of most developed economies. Yet, academics and policy makers have questioned the role of manufacturing in development for late industrializers, especially in view of rapid advancements in technologies and restructuring of international trade.Concurrently, industrialization and structural transformation are integral to the African Union’s Agenda 2063 and the development strategies of several countries in Sub-Saharan Africa (SSA). Given this renewed interest in industrialization across the region, a central question is not whether SSA countries should pursue industrialization as a potential path to sustainable growth but how to promote the prospects of industrialization. Industrialization in Sub-Saharan Africa: Seizing Opportunities in Global Value Chains addresses this question by reassessing the prospects for industrialization in SSA countries through integration into global value chains. It also examines the role of policy in enhancing these prospects. The main findings indicate that • SSA has not experienced premature deindustrialization; the region has witnessed substantial growth in manufacturing jobs despite a lack of improvement in the contribution of manufacturing value-added to GDP. • The region’s integration into manufacturing global value chains is reasonably high but it is dominated by exports of primary products and engagement in low-skill tasks. • Global value chain integration has led to job growth, and backward integration is associated with more job creation. The report emphasizes the role of policy in maintaining a competitive market environment, promoting productivity growth, and investing in skills development and enabling sectors such as infrastructure and finance. Policy makers can strengthen the global value chain linkages by (1) increasing the value-added content of current exports, (2) upgrading into high-skill tasks, and (3) creating comparative advantages in knowledge-intensive industries.
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