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Industries without smokestacks: Firm characteristics and constraints to growth

Brookings 2020.02.20
tructural change is taking place in Africa, but―in contrast with East Asia―export-led manufacturing is playing a minor role. Falling transport costs and progress in information and communications technology have, at the same time, created tradable services and agribusinesses that share firm characteristics with manufacturing. This paper reviews firm characteristics in major IWOSS industries and proposes an approach to identify country-level constraints to their growth. A review of current literature finds that four major industries without smokestacks―agroindustry and horticulture, tourism, ICT-based business services and transport and logistics―have many firm characteristics in common with manufacturing. There is evidence of the capacity for learning and productivity growth, and scale and agglomeration economies are important firm characteristics.

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