Since the advent of the first modern industrial parks in the 1960s, industrial parks have evolved in a variety of ways, from early enclaves to the contemporary economic zones, due to the increasing digital technologies being inextricably linked to urban growth, modernization and era of utilizing state-of–the art technologies.
The primary goals of establishing industrial parks are to immediately focus on macroeconomic concerns, particularly global interactions and disparities between developed and developing regions.
Cognizant of the fact that industrial parks have been playing a cardinal role in bolstering economic growth, The Ethiopian Herald had a stay with Mengistu Tulu, an economist graduated from Haramaya University in Agricultural Economics, to have professional point of view along that line.
He said, “Industrial parks can maximize resource integration for limited production factors within a certain spatial scope by attracting labor and capital-intensive domestic and foreign investment in manufacturing and service industries, for instance. Economic growth has been predicted to lead to greater equality, eventually eliminating poverty. On the other hand, in contrast to agriculture, industrial park development factors are more flexible and can adapt better to environmental, regional, and national conditions and circumstances. As a result of this remarkable phenomenon, many nations are concentrating their efforts on creating industrial parks as an economic engine. Nations have also been able to help their growth and development by acquiring with industry and utilizing the experiences of other countries.”
As to him, depending on Ethiopia’s geography, politics, infrastructure, and objectives, numerous industrial parks have been established across the nation and given due emphasis to the sector thereby booming the economic growth of the country.
Of the many countries widely exercising industrial park development, China stands out as the most successful example of industrial park development in terms of local benefits identified as economic zones. In addition, India has the most large-scale industrial parks from which Ethiopia can draw important lessons regarding this lucrative sector, he opined.
Mengistu further elucidated that, the development of the industrial park has been one of the priorities of the plans of different countries including ours and has created a magnitude challenge concerning regional disparities.
The policy implementation for industrial park development needs to take three crucial things into account: economic growth, environmental issues, and reduction in regional disparities and the development of industrial parks played an important role in regional development as regional areas benefit economically from the development of industrial parks, he added.
He said, “The establishment of industrial parks as a result of regional development can result in rapid urbanization, which can exacerbate the negative effects of pollution. However, such an unconstructive repercussion can be reverted by working hard. Industrial park developments have been increasingly important in developing regions during the last two decades. Industrial parks have enhanced regional development, demonstrating the necessity and significance of establishing industrial parks.”
According to Mengistu, for industrial park development, the Ethiopian government should stress green growth. Environmental issues are the primary steps of the development plan both in developed and developing countries. Thus, the traditional model of the industrial parks should be upgraded towards a green development plan.
A green environment includes the use of renewable energy, the design and implementation of green space in industrial parks, and the use of up-to-date materials in the construction of industrial parks. Due to this issue, the government should consider, instead of increasing the number of industrial parks in mega-cities, developing industrial parks in the rural and less developed regions based on the upgraded industrial park development, he said.
Therefore, Mengistu added the country can simultaneously achieve the superior goal of developing industrial parks considering sustainability economic, social and environment approaches.
No doubt, Mengistu stated, industrial parks have great importance for the economic development – from local and regional even to the global level. They represent modern platforms that provide excellent conditions for investment and development, encourage industrial development, and bring large benefits to the nation.
In highy developed countries, industrial parks are enormous business centers with the entire necessary infrastructure, and are placed at the intersections of key transport links. This has made it easier for tenants to do business, use resources, apply a circular business model, reduce expenses, and better manage their risks.
For underdeveloped and medium-developed countries such as Ethiopia, industrial parks are the most efficient way of stimulating economic development, modernizing the industry, embracing innovation, and increasing the number of jobs available.
The most important thing is that the development of parks attracts foreign investments, which is of strategic importance for these countries. What speaks to the importance of industrial parks is the fact that their concept has served as a model for creating new platforms, such as agro-industrial parks, technology or science parks, innovation districts and eco-industrial parks. This speaks to the possibility of adapting this concept to different conditions, such as the increasingly complex world economy and the need for new production processes and structures. Mengistu said industrial parks easily respond to new market demands, they are advancing and becoming an integral part of industrial development and beyond.
Industrial parks can have a positive influence on the revitalization of business environment, transfer of modern technologies, and the destructuralization and modernization of industry in any economy.
“Industrial parks are one of the most important factors supporting positive and progressive economic development. They strengthen the industrial base of small and medium-size towns, increase the efficiency of urban land use, and reduce rural-urban migration. Firms located in industrial parks often use the services of local companies, creating not only backward and forward linkages, but also diffusing economic learning to the wider business community.”
The concentration of firms can provide citizens at the vicinity with significant spillover effects both inside and outside the parks – that is, information spillovers, including knowledge and technology; the specialization and division of labor among enterprises; the development of skilled labor markets as well as the development of markets around the parks.
He said, “Well planned and equipped parks stimulate the relocation of industries to semi-urban or rural areas and help to relieve congestion and pollution in metropolitan areas. Further, industrial parks represent an opportunity for an influx of foreign investment and decrease of unemployment by means of creation of new jobs and other benefits of regional industrial development of the economy.” Industrial parks have undoubtedly a positive impact on business in a country where they are located. They are beneficial in the fact that they apply modern technologies and innovations, bring economic and innovative potential or internationally well-proven know-how, and thus support the process of reconstruction and modernization of the industry, he added.
As inadequate infrastructure is a major factor hindering the industrial development of the emerging states of the nation, this challenge and related hurdles have to be well abated thereby declaring poverty free nation. The development of such parks will encourage the pace of modernization so that the industrial units will become more competitive and investor-friendly in the underdeveloped parts of the country. With a clear and pragmatic approach, the governments of Ethiopia is adopting various policy measures for the development of industrial parks in their strategic sectors so as to utilize fully their immense industrial as well as agglomeration potentials for making the country a vibrant industrialized economy with faster, inclusive, and sustainable economic growth.
According to Mengistu, a green environment includes the use of renewable energy, the design and implementation of green space in industrial parks, and the use of up-to-date materials in the construction of industrial parks. Yes, industrial parks development has been increasingly important in developing the country over the last few years.
Generally, industrial parks are significantly useful in enhancing economic development, promoting production and productivity as well as excellently reducing poverty via creating a number of job opportunities for many. The significance of establishing industrial parks has to be well expedited as it would be instrumental in helping the nation defeat poverty and underdevelopment as the latter has been the long awaited vision of the nation.
BY MENGESHA AMARE
THE ETHIOPIAN HERALD TUESDAY 20 AUGUST 2024
