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New data reveals developing economies are bucking trend of de-industrialization — UNU-WIDER

Researchers from the Groningen Growth and Development Centre (GGDC) and the United Nations University World Institute of Development Economics Research (UNU-WIDER) find many developing countries around the world have reversed the trend of deindustrialization, showing signs of a ‘renaissance’ in manufacturing since the early 2000s.

Helsinki, FinlandNew research that reveals developing countries across Asia and sub-Saharan Africa registered a marked increase in manufacturing employment between 2010–18.

  • In Asia, the average share of employment in manufacturing was found to have increased from 11.9% in 2010 to 13.4% in 2018.
  • In sub-Saharan Africa, the share of workers in manufacturing rose by 1.2 percentage points from 7.2% to 8.4 % over the same period.

This is the first analysis using the new GGDC/UNU-WIDER Economic Transformation Database (ETD), an open access database containing data on the economic growth and labour inputs for over 50 developing economies across Asia, Africa, and Latin America.

According to Gaaitzen de Vries, lead researcher of the collaborative project between GGDC and UNU-WIDER, these findings re-open the debate about the patterns of industrialization currently under way in developing countries: ‘The results challenge the long-held view that the developing world is de-industrializing. In sub-Saharan Africa in particular, the remarkable recovery provides a message of hope that rather than running out of options in manufacturing, developing economies can continue to look at expanding their activities as a steppingstone to economic growth and development’, de Vries underlines.

Kunal Sen, Director of UNU-WIDER and co-author of the study, says: ‘The new database will be an invaluable tool for developing evidence-based policy solutions with human development and decent work at their heart. This paper is just a small example of the significance this information holds … Especially as we face a daunting task of rebuilding economies post-COVID-19, knowing that manufacturing can play a role in growing developing economies provides policy makers with a valuable tool for recovery’.

Key findings and recommendations

  • Previous conclusions that the developing world is permanently de-industrializing were premature.
  • Industrialization in sub-Saharan Africa appears to have been spurred by unregistered, small businesses producing low-quality goods for domestic markets. In Asia, the drivers for industrialization are more diverse.
  • Policy makers should not give up on the potential of manufacturing as a policy tool for developing countries in achieving sustainable development.

Contact
For interviews and further information, please contact Ruby Richardson, UNU-WIDER
[email protected], +358 9615 99257 

About the new database

  • The GGDC/UNU-WIDER Economic Transformation Database (ETD) launches 17 February 2021.
  • The ETD is an open access database on the measures of economic growth and labour inputs for 51 economies across Asia, Africa, and Latin America.
  • Expanding on the data of its predecessor, the GGDC 10-sector database, the ETD distinguishes between 12 sectors of the economy according to the International Standard Industrial Classification (ISIC) revision 4, and includes time series with annual data from 1990 to 2018.

Further information