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International Conference Manufacturing Led Growth for Employment and Equality IDR 2013 Sustaining Employment Growth: The Role of Manufacturing Structural Change Nobuya Haraguchi UNIDO 21 st May 2014
What is the report about? Global long-term trends in industrial structural transformation and employment What drives manufacturing development and through it employment at different income levels Industrial policies to generate employment through industrial structural transformation in developing countries What role for the international community in helping bringing about industrial development.
Main Findings 4
Is manufacturing still an engine of growth and employment generation? 5
Annual Growth Rate of GDP per capita Engine of Growth? 8.0% 7.0% Economic growth and changes in the MVA share in GDP (selected regions and country groups, 1970 2007) China 6.0% First-tier newly industrialized 5.0% economies Eastern Europe (1995- CIS (1995-2007) 2007) 4.0% Southeast Asia 3.0% Central America and South Asia 2.0% the Caribbean Semi-industrialized Middle East and 1.0% countries Northern Africa Low- to middleincome Sub-saharan Africa 0.0% Latin America -1.0% 0.0% 1.0% 2.0% 3.0% Annual average growth in the share of Manufacturing VA in GDP Source: Adapted from UNDESA 2006a based on CIC 2009; World Bank 2013b. 6
Percent 100 90 80 70 60 50 40 30 20 10 Engine of Growth? GDP composition by sectors, Republic of Korea(1960 2005) US$ 22,084 (2005 PPP) US$ 1,744 (2005 PPP) GDP Growth: 5.5% 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Manufacturing Non-manuf industries Agriculture Services Source: Adapted from Szirmai 2009; Szirmai et al. 2013, page 11. 7
Post Industrial Society? 8
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Million of people Post Industrial Society? 3,500 Figure 12. Total Labour Force, Total Employment, and Total Manufacturing Jobs, 1995 and 2009 3,000 3,041 2,880 2,500 2,454 2,330 2,000 1,500 1,000 500 16.1% 374 470 0 1995 2009 Labour Force Total Employment Total Manufacturing Jobs 16.3% of total labour force
Are jobs traveling away? 11
Where are the jobs going? Source: UNIDO s elaboration based on UNIDO Database and WIOD 12
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Manufacturing Jobs Geographical Distribution in 2009 Europe & Cent Asia, 73,518 North America, 23,106 Middle East & North Africa, 9,972 East Asia, 200,513 South Asia, 81,825 Sub-Saharan Africa, 20,771 TOTAL 471 million jobs Latin America, 58,217 Oceania, 2,319 Europe & Cent Asia North America South Asia Latin America East Asia Sub-Saharan Africa Middle East & North Africa Oceania Source: UNIDO, INDSTAT, WIOD and ILO
What is there in manufacturing for the least developed and lower middle income countries? 15
Change in value added per capita by income, low- and lower-middle incomes (1963 2007) Source: UNIDO s elaboration based on CIC 2009; UNIDO Database. 16
Changes in employment by income and manufacturing industry (1963 2007) Source: UNIDO s elaboration based on CIC 2009; UNIDO Database. 17
Middle income countries 18
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Changes in employment by income and manufacturing industry (1963 2007) Source: UNIDO s elaboration based on CIC 2009; UNIDO Database. 20
Millions South Africa 30 MVA/GDP in %, 1960-2012 Manufacturing / GDP 2.5 Manufacturing employment 1970-2010 25 2 20 1.5 15 1 10 0.5 5 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Source: UNIDO 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 Formal manufacturing employment Informal manufacturing employment Interpolated informal 21
South Africa: real value added shares, (1963 2010) Food and beverages Fabricated metals Machinery and equipment Motor vehicles Basic metals Furniture n.e.c. Coke and refined petroleum Non-metallic minerals Electrical machinery and apparatus Chemicals Wearing apparel Textiles Rubber and plastics Paper Publishing and printing Wood Precision instruments Tobacco 0% 5% 10% 15% 20% 25% 1963 2010 Source: INDSTAT 22
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What s left for high-income countries? 24
Changes in value added per capita by income and manufacturing industry (1963 2007) Source: UNIDO s elaboration based on CIC 2009; UNIDO Database. 25
Source: Own elaboration based on WIOD
Source: Own elaboration based on WIOD
Source: Own elaboration based on WIOD 28
What drives industrial structural change and employment generation? Existing drivers include wages, skills, technology and innovation, industrial organization, business environment, trade and investment Emerging drivers include resource efficiency Yet the impact of new and emerging drivers of structural change on employment depends on the industrial policies at hand 29
What role for industrial policy content and process? Promoting structural change Targeting key drivers of structural change Getting industrial policy to work: focus also on process Experimenting, learning and evaluating 30
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