I suspect we’ll see a lot of articles in the coming years like this one at VoxEU, proposing that Ethiopia’s economic development plans might want to consider skipping industrial development and go straight to a post-industrial economy:
A country’s path to middle-income status lies, in large part, through industrialisation. African countries are scrambling to bring industrial firms into the continent. As low-income countries industrialise, more workers will be able to choose between informal self-employment and low-skill manufacturing. What do workers trade off when they make this choice, and what are the long-run impacts? How well do we understand the relative costs and benefits of these types of work?
It seems to me that the opportunities for developing countries are closing rapidly. With China’s manufacturing economy overbuilt as enormously as it is, many sectors capable on their own of supplying the entirety of world demand, how much room is there for more industrial development? With an India full of (more or less) English-speaking and college educated people looking for jobs, what opportunities are there for Ethiopian service providers?
Greece is just full of small companies and entrepeneurs. The problem there is capitalization. Why won’t an Ethiopia that skips the industrialization step succumb to the same problems Greece has?
