The importance of manufacturing development and structural change for pro-poor growth

Abstract

This chapter sets out to elaborate on the importance of industrial structural change by investigating development patterns in manufacturing. Its aim is to highlight the relevance of manufacturing and to promote pro-poor growth pathways of industrial development. This is done by means of carefully disaggregating and analyzing structural change patterns, taking into account various sources of heterogeneities and variations, all of which are discussed in the context of their theoretical ramifications derived from the literature. It revisits the current debate on whether the importance of manufacturing for economic development has changed by reviewing the latest advances in the field which we link to supplementary empirical evidence. The analysis highlights the continued importance of manufacturing and the key role of industrial policies in the process of industrialization. Taking a more granular view on the topic of manufacturing development, this chapter furthermore explores the dynamics of structural change within manufacturing and delineates a path of inclusive manufacturing development for pro-poor growth.