On Monday, May 13, 2019, the Brookings Africa Growth Initiative hosted the first workshop for its new project on addressing the youth unemployment challenge in Africa through the creation of large-scale employment opportunities in “industries without smokestacks.”
Industries without smokestacks are defined as industries that are not recognized as traditional manufacturing, but share its economic benefits—that is, tradability, the ability to absorb a large number of moderately skilled workers and provide good wages, as well as display the potential for productivity increases to accelerate structural transformation. Since Africa has historically struggled to industrialize with traditional manufacturing, industries without smokestacks such as horticulture, travel and tourism, and transportation are alternative sectors they could help push Africa through a pivotal and challenging step in the development process.
This two-year project is a follow-up study to the joint work completed with UNU-WIDER on “Industries without Smokestacks: Industrialization in Africa Reconsidered.” The workshop focused on developing a set of analytical frameworks to assess the employment creation potential of these industries and the enabling environment to guide forthcoming country case studies. The discussions centered around three sessions that each took a deep dive into a specific aspect of the youth unemployment challenge and featured experts topically and geographically diverse who provided peer-reviewed comprehensive feedback on initial drafts of working papers that will be published later this year.
Session 1 explored the challenge of structural transformation in Africa and the job creation potential for industries without smokestacks. Participants discussed the limited job creation seen in manufacturing, traditionally a key component of the structural transformation process, in Africa. The quality of employment statistics in Africa was also discussed, particularly as it relates to identifying high employment data sources for industries without smokestacks.
Session 2 discussed employment potential in industries without smokestacks and their labor skills requirements. Here, workshop participants first discussed the labor employment component and the growth potential of industries without smokestacks, debating their potential to create the number of quality jobs Africa will need. Then, they debated new methods for identifying the types of skills and training young people would need to be able to work in industries without smokestacks.
Session 3 centered around firm characteristics and constraints to growth for industries without smokestacks. Participants dove into the practicality of first identifying which industries without smokestacks are the most promising for a particular country, and then being able to identify and overcome the binding constraints that industry faces. Another critical topic in this session was the role of government in promoting and supporting industries without smokestacks, including the effectiveness of mechanisms such as local tax incentives, subsidies, and special economic zones.
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