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Industrial Development Report 2013

Sustaining Employment Growth - The Role of Manufacturing and Structural Change

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The Industrial Development Report 2013 examines the role of structural change and employment and explores the underlying drivers of structural change in manufacturing. While manufacturing employment is growing in developing countries, its decrease in developed countries is being mitigated by the rise in manufacturing-related services employment. The food and beverages and textiles and garments industries offer least developed countries tremendous potential for industrialization, whereas high-tech industries hold numerous opportunities for developed countries to invest and innovate and to thus sustain jobs. The impact of the critical drivers of structural change and industrialization—namely costs, technology, demand and resource efficiency—to sustain employment hinges on the industrial policies adopted. These must therefore be geared towards the structural transformation of the economy and will only be effective if the policy-making process plays as important a role as the policy content.

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Executive summary

Jobs do not fall like manna from heaven. They arise from the process of economic development and from the efforts of entrepreneurs and governments to generate new enterprises and economic activities. Sustained job creation requires structural change, that is, the ability of an economy to constantly generate new fast-growing activities characterized by higher value added and productivity as well as increasing returns to scale. Manufacturing offers greater opportunities than other sectors to accumulate capital, exploit economies of scale, acquire new technologies and – more fundamentally–foster embodied and disembodied technological change. It is thus the core of economic growth and structural transformation.

English

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