MANUFACTURING IN STRUCTURAL CHANGE IN AFRICA 39
Indigenous Entrepreneurship in Small-Scale Manufacturing The third variety of future industrialization consists of promoting high-tech start-up firms to provide platforms for small-scale manufacturers deploying the technological advances of the Fourth Industrial Revolution, such as additive manufacturing (3D printing) and robotics. Advances in these areas arguably have created new opportunities for manufacturing growth in Africa. Although 3D printing is still in its infancy in Africa, the region’s adoption lag is shrinking relatively quickly. The technology could possibly make manufacturing easier and more accessible to the many artisans, small businesses, and informal entrepreneurs that form the core of most African economies. Increasing the uptake of this technology, together with other robotics to transform the region’s manufacturing sector, will require investing in producing tech entrepreneurs and in the continentwide rollout of the Internet of Things. There are encouraging signs. For example, with digital development, the region is growing more connected. The share of the region’s population using the internet reached almost 30 percent in 2018, up from 13 percent in 2013. At the same time, Africa has seen a rise in the number of tech start-ups and tech hubs, and growth in the tech ecosystem. Tech hubs in the region grew by 41 percent, from 314 in 2016 to 442 in 2018. Furthermore, the volume of funding raised by tech start-ups across the continent has soared. Overall, the region’s tech startups attracted about US$334.5 million in investment in 2018 (GSMA 2018). In addition to supporting the birth and growth of emerging entrepreneurs, promotion of innovation in small-scale manufacturing is necessary for industrial upgrading even in traditional labor-intensive sectors. Increased investment in digital and associated technologies could provide opportunities to leapfrog traditional industries. African countries will experience a variety of industrial futures going forward, and industrialization has the potential to be the engine of growth. However, successful industrialization will require pragmatic, pluralistic, and entrepreneurial-based industrial policy approaches linked to new disruptive technologies to improve and sustain the momentum of the recent growth in the sector.
Note 1. Rijkers, Freund, and Nucifora (2014) show that Tunisia’s industrial policy was used as a vehicle for rent creation for businesses owned by the then-president and his family.
