Africa Unlikely to Follow East Asia’s Manufacturing Growth Path – Study by Reuters

Study Reveals Africa’s Shift from Manufacturing to Services

WASHINGTON – A recent study indicates that African nations are unlikely to adopt East Asia’s successful development strategy, which relies on expanding manufacturing to alleviate poverty. The research highlights a projected decline in factory jobs across many countries by the middle of the century.

The paper, released by the Center for Global Development, predicts a decrease in the number of manufacturing workers worldwide by 2050. In fact, even in economically disadvantaged countries with plentiful inexpensive labor, the growth of manufacturing jobs is expected to stall.

China stands out as a likely exception, with forecasts suggesting that its share of global manufacturing output could rise from 30% in 2018 to 43.8% by 2050, up from just 10.5% in 1975. Authors of the study contend that China will not only maintain its manufacturing dominance but will also transition into higher-value production sectors.

While this shift may present opportunities for other developing nations in Africa, Southeast Asia, and Latin America to engage in lower-end manufacturing vacated by China, it is insufficient to replicate the East Asian model of transitioning from agriculture to manufacturing. Instead, researchers Charles Kenny and Ranil Dissanayake argue that many countries may leap directly from agriculture to services. This transition is likely to result in rapid job growth, particularly due to advancements in technology, even in nations such as Bangladesh and Ethiopia.

Kenny emphasized that "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." He further suggested that as agricultural jobs diminish across Africa and Asia, individuals are more likely to move into service-oriented roles rather than factories.

The study forecasts global economic growth through 2050, analyzing changes within the economies of 59 countries that collectively represent about three-quarters of the world’s GDP and population. It anticipates that in the lowest-income countries, the growth of factory jobs will barely keep pace with population increases over the next three decades, leading to manufacturing remaining a minor aspect of these economies.

According to the findings, manufacturing roles across all low-income countries are expected to account for less than 8% of overall employment. In high-income nations, the share of manufacturing jobs is also projected to decline, hitting 8.3% by 2050 compared to the current 11.4%. The report predicts that private service sector jobs will represent roughly 37% of global employment by 2050, increasing from approximately 12% in today’s low-income countries to 26%.