A recent study conducted by the Center for Global Development has unveiled a challenging outlook for African nations aiming to replicate East Asia’s success in industrialization as a means to alleviate poverty. The research, encompassing 59 countries, including China, indicates a dwindling share of factory employment worldwide by mid-century, even in countries with an abundance of low-cost labor.
Contrary to the trajectory followed by East Asian nations, most countries, particularly in Africa, are projected to experience stagnation in manufacturing job growth. While China is anticipated to continue expanding its manufacturing output, dominating the global landscape, other developing regions, including Africa, Southeast Asia, and Latin America, are unlikely to follow suit.
The study’s authors, CGD senior fellows Charles Kenny and Ranil Dissanayake, assert that many countries will bypass the traditional agriculture-to-manufacturing transition and instead leapfrog into the services sector. This shift is expected to occur at an accelerated pace, driven in part by technological advancements, even in countries like Bangladesh and Ethiopia.
Kenny emphasized, “There’s still a popular idea that low-income countries will progress naturally from being dominated by agriculture to manufacturing-led growth, but mounting evidence suggests that’s not going to happen. We think that farms are going to empty out across Africa and Asia in the coming decades, but people are likely to flood into offices and shops, not factories.”
The study’s global projections through 2050 highlight a significant trend. For the world’s lowest-income nations, the number of manufacturing jobs is expected to barely keep pace with population growth over the next three decades, with manufacturing remaining a relatively small sector in their economies. In low-income countries, manufacturing jobs are forecasted to remain below 8% of total employment.
In contrast, the private service sector is set to thrive, accounting for approximately 37% of global jobs by 2050, and 26% in today’s low-income countries, compared to approximately 12% presently.
While China appears to be an exception, expanding its manufacturing output significantly, the rest of the world, including Africa, is poised to take a different development path. Rather than following East Asia’s manufacturing-focused model, many nations will chart a course directly from agriculture to services.
This evolving economic landscape presents opportunities for job creation, technology adoption, and the diversification of economies across the African continent. While the manufacturing growth trajectory may not mirror East Asia’s, there is hope that Africa’s unique path will bring prosperity and development in its own right.
Source: Reuters
