Ebook: African Industrial Policy in an Era of Expanding Global Value Chains: The Case of Ethiopia's Textile and Leather Industries

Throughout the history of capitalism, the process of industrialisation has been recognised as
the engine of economic development. No region in the world ‘suffers’ more acutely from a
lack of industrialisation than Africa, clearly highlighting the need for industrial policy.
However, the formulation of such policies is not straightforward in the current era of globalised
production. In recent years, a debate has taken hold over whether the geographical expansion
and increased fragmentation of production networks—often referred to as the expansion of
global value chains (GVCs)—calls for new approaches to industrial policy in developing
countries. By drawing on the case of Ethiopia, this dissertation demonstrates that industrial
policy in developing countries needs no new ‘magic bullet’ in the era of expanding GVCs.

The dissertation applies a funnelling technique, meaning that each chapter builds on
information presented and arguments made in the preceding chapters.

Chapter 2 contextualises the importance of manufacturing and industrial policy for
economic development in Africa. The chapter argues that the manufacturing sector continues
to play an integral role in the process of economic development, and discusses the role of the
state in the process of industrialisation, arguing that there are strong justifications for
intervention through industrial policy.

Chapter 3 looks at how the expansion of GVCs affects the productive structures of
developing countries, particularly those in Africa, and asks if industrial policy has to change in
this new global production environment. I argue that the fundamental problems of participating
in GVCs are the same as when countries like South Korea and Taiwan industrialised between
1960 and 1990, although on a different scale.

Chapter 4 analyses Ethiopia’s industrialisation trajectory and GVC-oriented industrial
policies in the textile and leather industries. This analysis is based on 6 months of fieldwork in
Ethiopia, where I carried out several interviews with stakeholders in the private and public
sector and collected and collated datasets on industrial performance in collaboration with
government agencies. While the findings of this chapter make an original empirical
contribution to explaining the specific case of Ethiopia, the insights provided by the analysis
offer broader conceptual conclusions as well.