Poor Countries’ Technology Dilemma
Recent patterns of technological change in the rich world have made it more difficult for low-income countries to develop and converge with income levels in the developed world. These changes have contributed to deepening economic and technological dualism even within the more advanced segments of developing countries’ economies.
CAMBRIDGE – Economic development relies on the creation of more productive jobs for an ever-rising share of the workforce. Traditionally, it was industrialization that enabled poor countries to embark on this transformation. Factory work may not have been glorious, but it enabled farmers to become blue-collar workers, transforming the economy and society as a result.
Many low-income countries in Africa and elsewhere hope to travel a similar path in the future. While none necessarily expects success on the scale of China and the East Asian tigers before it, industrialization and integration into global value chains are viewed as essential for achieving rapid economic growth – or restoring it after the COVID-19 pandemic – and creating a large number of jobs for Africa’s young population.
Prior to the pandemic, African countries had already achieved some success in industrialization. Ethiopia has established an export-oriented garment and footwear sector, with help from Chinese and European investors. Tanzania has built a more resource-intensive manufacturing sector focused on serving domestic and regional markets. Recent research suggests that the premature de-industrialization to which the continent had been subject may have been halted or even reversed after the early 2000s.