布鲁金斯学会-无烟囱工业解决失业问题的潜力：埃塞俄比亚案例研究（英）-2021.11-36页_978kb

Summary of "The Potential of Industries without Smokestacks to Address Unemployment: An Ethiopia Case Study"

Core Content

This study examines the potential of Industries Without Smokestacks (IWOSs) to create employment in Ethiopia, with a focus on agro-processing (particularly food and beverage), horticulture, tourism, and transport sectors. The analysis is based on data from 2000 to 2017 and highlights the role of IWOSs in driving economic growth and employment, particularly for the youth.

Main Points

1. Economic Growth and Structural Transformation

• Ethiopia has experienced significant economic growth, averaging around 10% since 2004, driven by public investment in infrastructure and the service sector.
• Despite this, structural transformation has been limited, especially in terms of employment.
• In 2017, the service sector contributed the largest share of value added (47%), followed by agriculture (36%) and industry (17%).
• The manufacturing sector (excluding construction) remained at less than 5% of GDP until 2017, indicating slow structural change.

2. Labor Market Trends

• Ethiopia's population has grown rapidly, with an urban population increase of about 5.7% annually from 2003 to 2018.
• The labor force (economically active population aged ten and above) grew at an annual rate of 6.2% during the same period.
• Unemployment rates remain high, especially among youth and women:
  • General urban unemployment: 19% (2018)
  • Youth unemployment: 25% (2018)
  • Women unemployment: 27% (2018)
• More than a third of young women remain unemployed, and those who are employed often face underemployment, low earnings, and job insecurity.

3. Role of IWOSs in Employment and Productivity

• IWOSs include agro-processing, horticulture, tourism, financial and business services, and transport.
• These sectors exhibit higher labor productivity compared to other sectors:
  • In 2017, labor productivity in IWOSs was Birr 91,730, three times the national average.
  • The IWOSS sectors grew at an annual rate of 16%, significantly outperforming manufacturing (13.4%) and non-IWOSS industries (6%).
• The fastest employment growth was observed in mining (non-IWOSS), finance (IWOSs), utility (non-IWOSS), construction (non-IWOSS), and transport (IWOSs).
• The food and beverage industry, a key component of the agro-processing sector, was the largest employer in the manufacturing sector in 2017, contributing about 21% of the total employed in the manufacturing sector.

4. Productivity Drivers

• Within-sector productivity accounted for 67% of the overall labor productivity growth between 2010 and 2017, while structural change contributed the remaining 33%.
• Sectors like trade, agro-processing, and hotels and restaurants showed high within-sector productivity.
• Financial services and horticulture gained more from labor mobility.
• The construction sector benefited from both within-sector and structural transformation.
• The agricultural sector saw a modest within-sector productivity gain but experienced significant labor outflow.

5. Export Trends

• Agriculture remains the main export sector, with coffee, oilseeds, chat, and gold as the top exports in 2017.
• Manufacturing exports, particularly leather and textiles, lag behind agricultural exports in terms of value share, indicating limited structural transformation.

6. Challenges to IWOSs Growth

• Skilled labor shortages and skills mismatch are major constraints in agro-processing, horticulture, and tourism.
• Inadequate raw materials, poor infrastructure, and high transportation costs hinder productivity and competitiveness.
• Cool chain management deficiencies are a key issue in the horticulture sector.
• Political instability is a major challenge for the tourism industry.
• Low promotion and marketing efforts limit the development of tourism in Ethiopia.

Key Sectors and Their Performance

3.2.1 Agro-processing (Food and Beverage Industry)

• The food and beverage industry is the leading contributor to value added in the manufacturing sector, accounting for a third of the total in 2017.
• The gross value of production increased from Birr 3.3 billion in 2001 to Birr 54.6 billion in 2017, reflecting an average compounded growth rate of 18%.
• The beverage subsector, particularly malt liquors and soft drinks, leads in value addition.
• Labor productivity in the food and beverage industry grew at an average of 16.5% annually between 2002/03 and 2016/17.
• The sector remains the largest employer in the manufacturing industry.

3.2.2 Horticulture

• Horticulture is a significant IWOSs sector with high potential for growth.
• It gained more from labor mobility than from within-sector productivity.
• However, lack of cool chain management is a major constraint, affecting its competitiveness and export potential.

3.2.3 Tourism

• Tourism is a growing IWOSs sector, but it faces political instability and limited promotion and marketing.
• The sector has the potential to create decent jobs but requires targeted support to overcome these challenges.

3.2.4 Transport

• Transport is a key IWOSs sector with high productivity.
• It has shown the fastest employment growth and is one of the most productive sectors in 2017.
• The sector benefits from public and private investment and is critical for economic integration and logistics.

Policy Implications

• To unlock the growth potential of IWOSs, targeted interventions are needed to address skills gaps and improve labor mobility.
• Skilled-related interventions should focus on vocational training and align education with sectoral needs.
• Other interventions include improving infrastructure, enhancing logistics, and strengthening cool chain management in horticulture.
• Public-private partnerships and investment in integrated agro-industrial parks are essential to support the development of these sectors.

Conclusion

• IWOSs have shown greater potential for employment and productivity growth compared to traditional industries in Ethiopia.
• While they contribute significantly to the national economy, their growth is constrained by several factors including labor skills, infrastructure, and market access.
• The study underscores the need for policy reforms and sector-specific support to ensure that IWOSs can play a more significant role in addressing unemployment and promoting economic diversification.

Key Takeaways

• IWOSs are more productive and have higher growth potential than traditional industries.
• Agriculture remains the largest employer, but IWOSs are key to creating decent and sustainable jobs, especially for the youth.
• Structural transformation is limited, with most labor still concentrated in agriculture.
• Skills development and infrastructure improvement are critical for the future growth of IWOSs.