A STUDY released on Monday by the Centre for Global Development challenges the notion that African countries will mirror East Asia’s development model of manufacturing-led growth to alleviate poverty. Instead, the research suggests a declining share of factory jobs globally by mid-century, even in nations with low labour costs.
While the study projects a decrease in the number of factory workers worldwide by 2050, it indicates an exception in China’s case. China is expected to further expand its manufacturing output share among the 59 countries examined, increasing to 43.8 percent in 2050 from 30 percent in 2018 and 10.5 percent in 1975. However, the study emphasises that China will transition to higher-value manufacturing segments.
For many developing countries in Africa, Southeast Asia, and Latin America, the East Asian development model of moving from agriculture to manufacturing may not be replicable. Instead, the study’s authors, CGD senior fellows Charles Kenny and Ranil Dissanayake, anticipate a direct shift from agriculture to the services sector. They predict that service sector jobs will grow rapidly, especially driven by new technologies, even in countries like Bangladesh and Ethiopia.
Charles Kenny explained, ‘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. We think that farms are going to empty out across Africa and Asia in the coming decades, but people are likely to flood into offices and shops, not factories.’
This study projects global economic growth until 2050 and models changes in the economies of 59 countries, collectively representing approximately three-quarters of the world’s GDP and population. It foresees that, even in the lowest-income countries, the number of factory jobs will only marginally keep pace with population growth in the next three decades, and manufacturing is expected to remain a relatively small part of their economies.
The research also highlights that, across all low-income countries, manufacturing jobs are projected to remain below 8 percent of total employment. Additionally, the study indicates a continuous decline in the share of manufacturing jobs in high-income countries, dropping from 11.4 percent currently to 8.3 percent by 2050.
In contrast, the private service sector is anticipated to comprise approximately 37 percent of global jobs by 2050, with a significant rise to 26 percent in today’s low-income countries, up from about 12 percent at present.
