Structural transformation and technological upgrading are main drivers of productivity and job growth. Experience shows that countries differ in the patterns of productive transformation. Successful catching up countries have not only been growing at high and sustained rates, but with a pattern characterized by sectoral transformation with manufacturing as a leading sector, diversification into complex economic activities, a high rate of technological change and the creation of productive jobs with high developmental value. Experience also shows that country-specific social capabilities determine the options and patterns of structural change and the boundaries of productive transformation paths. A dynamic framework of catching up is presented that explains high-performing and sustained catch up growth as an interrelated process of transforming productive capacities, social capabilities and the patterns of jobs. This challenges governments to develop a long-term vision of high-performing productive transformation paths that enhance productive capacities, create productive jobs with high developmental value, and create rapid learning effects in societies, enterprises and the labour force to enhance social capabilities. This perspective enlarges the scope for industrial policies and highlights individual and collective learning as a central objective of industrial policies, in addition to productivity and job growth. The need to improve government capabilities in formulating, implementing and monitoring industrial policies is discussed.


Workshop on "Boosting economic dynamics and job growth: the potential of industrial policies" organized by the ILO and the Geneva Office of the Friedrich Ebert Foundation (FES) 4-5 March 2013.