Needless to state, manufacturing sector or industryis of paramount importance in fueling economic development and social dynamics as well as growth trajectories of developing countries such as Ethiopia.
Unequivocally, manufacturing is the engine of growth and the subsector in Ethiopia is fueling poverty reduction strategies as well as contributing some degree of competitiveness to the continental and global markets. The sector offers special opportunities for industrial progress and it is highly intertwined with other sectors such as the service one.
Keeping the myriads of benefits of the sector for national advancement, The Ethiopian Herald had a stay with Segni Bekele, an industrial engineer graduated from Bahir Dar University in Engineering, to harvest a piece of information about industrial economic contribution and manufacturing sector paybacks for economic advancement.
He said, “Revitalizing the manufacturing—an industry that has been witnessed a beating heart of the country’s economy—could be fundamental to resolving a range of inequities via driving sustainable, inclusive growth. The capital goods that are employed in other sectors are produced in the manufacturing sector, and manufacturing has been witnessed to be a key part of the solution to economic problems.”
According to Segni, the manufacturing sector is full of companies driving significant shareholder value. Investors and capital markets should start paying attention as the sector is a viable means to bring about change.
He further stated that recommencing capital stock in manufacturing sector could help the industry realize its full potential and get billions of investment flow.Not only does this bold move serve to modernize and digitize manufacturing infrastructure but it also triggers a virtuous cycle of increased economic activity among the societies across the nation.
Strengthening investments in this sector could also play a major role in tackling place-based inequalities from corner to corner, especially in communities left out of the prosperous tech and finance industries, he opined.
Amalgamating the manufacturing sector with those of service, construction and others would definitely pay off.
True, he said, manufacturing is the main economic engine and primary employer of thousands of millions of citizens across the nation such as in various industrial parks in the case of Ethiopia, for instance. In those industrial parks, the industry employs a broader swath of the overall population, and it is being run in a more inclusive manner.If, truly speaking, he added, Ethiopia attaches due emphasis to the manufacturing sector, it will definitely bring about a blueprint for success within the shortest time possible, via ensuring lasting peace across the nation as some sporadic skirmishes have given the smooth operation of manufacturing sector hard time especially these days.
He said, “Reviving the manufacturing sector could also add up to thousands of millions of jobs, particularly among middle-skill workers, helping recalibrate the labor market and bolster the middle class economy throughout the nation.”
As to Segni, revitalizing manufacturing means revitalizing the society, and realizing the benefits of a dynamic manufacturing industry will require a dual focus on modernization and workforce development.
The industry highly attracts innovation and active involvementof the young workforce across the economy to deliver lucrative businesses the people and capital they need to thrive. Hence, private and public sector leaders can play a great role in modernizing smaller manufacturing operations by providing them with financial programs and targeted business areas.
According toSegni, companies are expected to engage with universities, colleges, schools as well as communities through conglomeratesso as to boost industry’s innovations and it would this time provide workers with a number of job opportunities and gratifying engagements.
Here, he said, the public and private sectors are increasingly resolved to shore up the industry under discussion that has long been a pillar of the country’s economic fabric despite its sluggish pace compared to with what the nation has been endowed.
“The government and other stakeholders must focus their collective energy on urging investors and capital markets to turn their attention to manufacturing, enticing new talent and training the workforce for tomorrow’s jobs, and updating and digitizing the manufacturing infrastructure in the country as the manufacturing sector is primed to resume its position as a powerhouse of the economy.”
If the manufacturing industry capitalizes on multifarious opportunities by investing in innovation and workforce development, the gains will propel sustainable and inclusive growth as well as simultaneously fueling Ethiopia’s competitiveness on the continental as well as global stage since the country does have numerous avenues to come to the forefront regarding the manufacturing sector, he accentuated.
Thevery point that has to be well comprehended in this regard is that said Segni globalization of the manufacturing ecosystem has driven more changes and impacted the prosperity of more companies, nations and people than at any time since the dawn of the Industrial Revolution.
That is why nations around the world have been taking part in and benefited out of the rapid globalization of industry and expansion of manufacturing, he added.
Undoubtedly, globalization of manufacturing has been a key driver of higher-value job creation and a rising standard of living for the growing middle class in emerging nation economies like Ethiopia. A significant change in geopolitical relations between East and West, the widespread growth of digital information, physical and financial infrastructure, computerized manufacturing technologies, and the proliferation of bilateral and multilateral trade agreements have been unquestionably attributable to the ever-rapid globalization scenario, Segni underscored.
Such decisive factors have been profoundly reshaping manufacturing supply chains over the coming several decades he said adding that this reshaping will also be influenced by complex macroeconomic and geopolitical challenges such as exposure to currency volatility, sovereign debt pressures and emerging protectionist policies of many countries to gain access to emerging and prosperous new markets. In one way or another, all of these factors are driving more localized manufacturing supply chains.
As learnt from Segni, investing in effective infrastructure has been essential for emerging nations such as Ethiopia to be included as a potential location by multinationals and thus participate in the benefits derived from the globalization of manufacturing.
He said, “The manufacturing industry is of great interest to investors and business leaders hoping to take advantage of the opportunities presented by rapid globalization and the significant growth of the middle class in emerging markets, as well as serving high-value customers in developed markets with innovative new products and services.”
As manufacturing is indeed the foundation for building economic prosperity in industrialized nations, developing nations have to draw important lessons from the promising trend the former have been through with a view to bringing about real change in all aspects, he opined.
What is practically happening in Ethiopia today is technology and innovation drive growth within the sector and spurs a constant upgrading of its capabilities despite trying hurdles that need to be well addressed to help the nation garner the benefit it deserves from the potentially untapped sector.
Yes, he elucidates, the manufacturing sector evolves through global economic dynamics, as well as advanced equipment and processing technologies, to produce more diverse and sophisticated products. Thus, it opens the door not only for employment that requires higher skill levels at higher wages, but also for a greater convergence of skills and expertise.
Generally, Segni wrapped up his idea saying that the link between a thriving manufacturing sector and economic growth is a direct and significant one. Such a rewarding association particularly regarding employment and industries those themselves are linked, and the manufacturing sector has the largest multiplier effect of any economic zone. Thence, understanding the changes in manufacturing will help nations establish their own capabilities to innovate and set new development opportunities regarding all potential spheres.
BY MENGESH AMARE
The Ethiopian Herald October 29/2023
