JOB GAINS, PRODUCTIVITY GROWTH, AND THE ROLE OF UPGRADING 141
Figure 5.9 Correlation between GVC Participation and Changes in Industry Employment Shares Transport equipment Electrical and machinery Metal products Chemical and non-metal products Wood and paper Textiles and apparel Food and beverages 0
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Source: World Bank calculations using data from the United Nations Conference on Trade and Development’s Eora database and the United Nations Industrial Development Organization’s Industrial Statistics Database at the 2-digit level of ISIC (INDSTAT2). Note: The data are for Côte d’Ivoire, Cameroon, Ethiopia, Ghana, Kenya, Malawi, Senegal, and South Africa. Global value chain participation rate = foreign value-added shares in exports + indirect value-added shares in exports. For the leather industry, the GVC participation rate cannot be computed because of data unavailability. Correlation is significant except for food and beverages, textiles and apparel, chemical and non-metal products, and metal products. GVC = global value chain.
The manufacturing employment share remains relatively small in the region although it is increasing, and it is fair to say that many countries in the region are yet to have trends of successful industrialization. Nevertheless, industrialization will still be a key engine of growth in Sub-Saharan Africa, creating decent jobs, boosting productivity growth, and making a significant contribution to inclusive growth. The potential is huge, and there are reasons to be optimistic about the region’s industrial future. Sub-Saharan African manufacturing shares of employment and value added, although lower than the region’s comparators, are more stable than the shares in other regions and are increasing steadily, albeit from a low base (Naude 2019). Integration into GVCs is providing new windows of opportunity to grow jobs and increase productivity in the manufacturing sector. Countries in the region have benefited from insertion into GVCs to grow jobs. Not only has the region expanded jobs in manufacturing through GVCs, but the contributions of GVC participation to job growth in the other key sectors—agriculture and
