Tool 5 – Inclusive Industrial Development

Objective:

The aim of this tool is to provide analysts in low-income countries with some simple and intuitive diagnostic methods, which can help them to promote a process of structural change that generates broad-based quality employment and contributes to poverty alleviation.

Key questions addressed:

How efficiently is industrial development generating more and/or better jobs for your population?

Which industrial sub-sectors are generating the most/least productive employment opportunities?

Which sub-sectors are contributing the most/least to rising incomes as a result of enhanced productivity?

What is the relationship between the formal and informal manufacturing sector and how does this impact the livelihoods of formal and informal workers?

What are the potential indirect employment effects of industrial activities and how could industrial interventions ensure more broad-based sectoral growth through stronger linkages?

Which sub-sectors are contributing most to poverty alleviation as they expand (on the basis of formal/informal employment, wage generation, skill requirements and gender dynamics)?

Indicators used:

Employment Composition (Whole Economy)

Poverty Rate

Manufacturing Employment/MVA

Manufacturing Wage Bill/MVA

Manufacturing Employment Composition (Formal and Informal Sub-Sectors)

Manufacturing Sub-Sector Casualization Rates

Mnfg. Sub-Sector Average Annual Employment Growth Rate (Formal & Informal)

Manufacturing Sub-Sector Employment Elasticity (Formal & Informal)

Manufacturing Sub-Sector Wage Rates Relative to Minimum Wage (or GDP/Capita) for Formal & informal Sector

Manufacturing Sub-Sector Wage Inequality

Mnfg. Sub-sector Average Annual Wage Growth Rates (Formal & Informal)