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Can Africa ‘skip’ the industrialisation phase?

Can Africa ‘skip’ the industrialisation phase?. The role of manufacturing versus that of services in the process of economic development 20 October 2017, Bologna. Jostein Hauge Centre for Science, Technology and Innovation Policy. Why do African countries need industrial policy?

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Can Africa ‘skip’ the industrialisation phase?

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  1. Can Africa ‘skip’ the industrialisation phase? The role of manufacturing versus that of services in the process of economic development 20 October 2017, Bologna JosteinHauge Centre for Science, Technology and Innovation Policy

  2. Why do African countries need industrial policy? • Lessons for African countries from other countries that have been partly or fully successful with industrial policy (near and distant past). • Industrial policy for African countries in the new global environment • The proliferation of international trade agreements • The expansion of global value chains

  3. Why do African countries even need manufacturing? The ‘post-industrial society’ discourse

  4. Central arguments to the post-industrial society discourse • Scale economies and technological advances are more easily incorporated into services to increase efficiency.

  5. Central arguments to the post-industrial society discourse - continued • Revolutions in ICT and transport technology have made more services tradeable.

  6. Reasons to be skeptical of the post-industrial society discourse – clear observations with the benefits of manufacturing • No country, except a few small states exceptionally rich in oil (e.g., Qatar, Kuwait, Brunei) or very small financial havens (e.g., Monaco, Liechtenstein), has achieved high and sustainable standards of living without developing a significant manufacturing sector. • Non-tradability lies at the root of most services (e.g. cleaning, grooming, public utilities) whereas in theory, all manufacturing products can be traded.

  7. Reasons to be skeptical of the post-industrial society discourse – manufacturing as a driver of productivity Manufacturing is the driver of economy-wide productivity growth: • Lends itself easier to chemical processing and mechanisation than other activities. • Drives productivity in other sectors through providing inputs.

  8. Reasons to be skeptical of the post-industrial society discourse – the illusion of the manufacturing decline

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