Light Manufacturing in Tanzania argues that for Tanzania to remain one of the fastest growing economies in Sub-Saharan Africa, it has to make progress in the structural transformation that can lift workers from low-productivity agriculture and the informal sector to higher productivity activities. Manufacturing, which has been the main vehicle throughout the world to achieve this transformation, has remained stunted in Tanzania. Using new evidence, the book shows that feasible, low-cost, sharply focused policy initiatives aimed at enhancing private investment could launch Tanzania on a path to competitive light manufacturing. These initiatives would complement progress on broader investment reforms by increasing the share of industry in regional output and raising the market share of domestically produced goods in rapidly growing local markets for light manufactures. And, as local producers increase their scale, improve quality, and gain experience with technology, management, and marketing, they can take advantage of emerging export opportunities. In Tanzania, as in East Asia, policies that encourage foreign direct investment can speed industrial development and the expansion of exports. The impact of isolated successes can be multiplied. The strategies proposed here can launch a process that would create millions of productive jobs. Light Manufacturing in Tanzania has several innovative features. First, it provides in-depth cost comparisons between Tanzania and four other countries in Asia and Africa at the sector and product levels. Second, the book uses a wide array of quantitative and qualitative techniques to identify key constraints to enterprises and to evaluate differences in the performance of firms across countries. Third, it uses a focused approach to identify country- and industry-specific constraints. Fourth, it highlights the interconnectedness of constraints and solutions. For example, solving the manufacturing input problem requires actions in agriculture, education, and infrastructure. Detailed cross-country analysis was carried out in four subsectors in Tanzania: textiles and apparel, leather products, wood products, and agroprocessing. Based on this analysis, the book suggests directing government policies toward removing constraints in a few of the most promising light manufacturing sectors using practical and innovative solutions inspired by the fast-growing Asian economies the starting point of which 20 years ago was not so different from Tanzania's today. This book will be valuable to African policy makers, professional economists, and anyone interested in economic development, industrialization, and the structural transformation of developing countries.

Light Manufacturing in Vietnam makes the case that, if the country is to continue along a rapid economic growth path and create jobs, it must undertake a structural transformation that can lift workers from low-productivity agriculture and the mere assembly of imported inputs to higher-productivity activities. Vietnam needs to address fundamental issues in the manufacturing sector that, until now, have been masked by economic growth. The book shows that there is a dichotomy between domestic enterprises and enterprises supported by foreign direct investment. The dominant state-owned enterprises and foreign-invested firms are often not integrated with smaller, domestic firms through backward or forward links in the use of domestically produced inputs or intermediate products. Growth in the domestic light manufacturing sector has arisen from the sheer number of micro and small enterprises rather than from expansion in the number of medium and large firms. As a consequence, final products have little value added; technology and expertise are not shared; and the economy has failed to move up the structural transformation ladder. This structure of production is one of the reasons Vietnam's rapid process of industrialization over the last three decades has not been accompanied by a favorable trade balance. Policy measures to address problems in competitiveness in Vietnam must confront the dual structure of the light manufacturing sector, while raising the value added in the industry. To that end, measures must be taken to nurture the expansion of small domestic firms, while helping these firms to achieve greater productivity through trade integration. This will require improvements in labor skills and technology and in the quality and variety of products able to compete with imports. Policies to reduce the role of the state-owned sector, promote trading companies, encourage clustering and subcontracting, and raise foreign and social networking are important in this respect. To boost the value added of its goods, Vietnam needs to integrate the supply chain in assembly activities by investing in the upstream production of the goods in which it has a comparative advantage in production and in which it has already established a market share, such as agribusiness, garments, and wood. Unlike downstream activities, however, the production of the associated raw materials and intermediate goods is capital intensive and technology driven, and it requires skilled labor. Inviting foreign direct investment into these areas and reforming education and vocational systems are the best means to reach this goal. For this reason, the government should launch a complete review of the incentives for foreign direct investment to focus on upstream production and on bringing in capital and technical expertise, while improving labor and entrepreneurial skills. Based on this analysis, Light Manufacturing in Vietnam proposes concrete policy measures to increase employment and spur job creation by addressing sector-specific constraints. The book presents a set of practical recommendations for policy makers to identify, prioritize, and remove the most serious constraints in each sector. This book will be valuable for policy makers, entrepreneurs, workers, professional economists, and anyone interested in economic development, industrialization, and the structural transformation of Vietnam and of developing countries.

Despite widespread agreement among economists that labor-intensive manufacturing has contributed mightily to rapid development in China and other fast-growing economies, most developing countries have had little success in raising the share of manufacturing in production, employment, or exports. Tales from the Development Frontier recounts efforts to establish light manufacturing clusters in several Asian and African countries, looking in particular at China. A companion volume to Light Manufacturing in Africa which laid out a strategy for injecting new industrial growth nodes into African economies Tales from the Development Frontier focuses on the six main binding constraints to competitiveness that nascent light manufacturing industries must overcome in developing countries: the availability, cost, and quality of inputs; access to industrial land; access to finance; trade logistics; entrepreneurial capabilities, both technical and managerial; and worker skills. The volume systematically explores potential growth opportunities in light manufacturing in a carefully selected subset of industries: agribusiness, apparel, leather goods, wood-working, and metal products. It specifies the constraints that need to be addressed before local and international entrepreneurs can take advantage of the latent comparative advantage available to many low-income economies in the target industries. It also proposes policies to ease the constraints policies that can open the door to rapid increases in industrial output, employment, productivity, and exports. The outcomes described in this volume include both inspiring successes and miserable failures in addressing the binding constraints in the identified sectors. These examples reveal how and why industrial development efforts in poor countries where, by definition, underlying conditions are far from ideal can accelerate growth. Most of the firms described in a series of case studies started from a very simple and modest base in an environment full of seemingly insurmountable obstacles. With its rich array of new material, this book will support the ongoing research of policy analysts focused on China and other developing countries. Above all, the volume aims to embolden business entrepreneurs and government officials in low-income countries to pursue newly emerging opportunities to expand and accelerate the growth of light manufacturing in their home economies."

This book presents empirical evidence on manufacturing firm performance in Africa based on the World Bank Enterprise Survey and on a one-time quantitative survey conducted for the World Bank by Oxford University's Centre for the Study of African Economies. Because of their institutional environment, their labor productivity is low, and their labor costs also tend to be low. Key constraints to firm growth vary by country, by sector, and by firm size. But the binding constraints for most large formal firms in Africa are access to finance and to electricity. The binding constraints for small firms tend to be access to finance and competition from foreign firms. After controlling for differences in firm characteristics, geography, infrastructure, political and institutional factors, business environment, and finance, the authors show that African manufacturing actually has a conditional advantage in productivity and sales growth. Political and institutional factors (especially party monopoly), access to finance, and the nature of the business environment are key to explaining the disadvantage of African countries in firm performance relative to countries at similar levels of income in which firms perform better. The results of the new Oxford survey, which covers both formal and informal firms, shed light on manufacturing firm performance in Africa in relation to that in Asian countries such as China. The survey results suggest that, whatever the reasons for China's success relative to Africa, it is unlikely to be less regulation. Indeed, China seems to have more stringent registration requirements and labor laws. It is also unlikely to be corruption, lower labor or land costs, or social networks: Chinese firms report fewer links with banks and politicians and fewer business friends. There also are no strong differences across the countries in the rate at which individual firms innovate and invest. The dimensions along which Chinese firms are at an advantage appear to be finance, competition, information about innovations, and educational attainment. Asian workers and entrepreneurs have more schooling. Nonetheless, education is not a good predictor of how quickly production workers can become fully active in firm operations.