Journal of African Trade

In Press, Corrected Proof, Available Online: 6 September 2019

Trade and Industrialisation in Africa: SMEs, Manufacturing and Cluster Dynamics

Authors
Raphael Kaplinsky1, Mike Morris2, *
1Institute of Development Studies and Science Policy Research Unit, University of Sussex, Sussex, UK
2School of Economics, University of Cape Town, Rondebosch, South Africa
*Corresponding author. Email: mike.morris@uct.ac.za
Corresponding Author
Mike Morris
Received 24 May 2019, Accepted 30 July 2019, Available Online 6 September 2019.
DOI
https://doi.org/10.2991/jat.k.190812.001How to use a DOI?
Keywords
African Clusters, African trade, Global value chains, Regional value chains, Industrial policy, Manufacturing SMEs
Abstract

Trade in manufacturing through global and regional value chains has played an especially prominent role in global economic growth in recent decades. However, Africa faces severe challenges in growing manufacturing activities in the face of China and Southeast Asia’s competitive dominance of global manufactured product markets. Traditionally, global trade is heavily concentrated at the corporate level. But this reliance on large firms as a driver of trade is problematic for Africa given its need for a more inclusive synergistic trade and economic growth path that is more employment intensive, more decentralised and which provides scope for enhanced activities by indigenous and small-scale industry. This is not to argue for the exclusion of large firms or foreign direct investment in economic growth, but rather to argue the case for an increased presence of indigenous small-scale firms in the economy and in export trade. There is evidence of dynamism in Africa, both within individual Small- and Medium-sized Enterprises (SMEs) and in clusters of SMEs. In understanding the challenges faced by this sector, and in examining the prospects for their participation in external trade, we review the experience of 25 African clusters using four dimensions: the nature of unintended externalities (e.g., external economies), market orientation and upgrading and growth trajectories, cluster dynamism and joint action for upgrading, external institutional support and upgrading. In terms of policy challenges for SMEs and export trade we discuss four major areas: (i) participation in governed global value chains feeding into high-income markets, (ii) export sales to non-regional low-income markets, (iii) export sales to regional markets and (iv) informal sector cross-border trade to regional economies. We conclude that for Africa, trade and industrialisation are integrally linked and attempts to facilitate regional trade policies cannot ignore the need for developing appropriate industrial policy and adopting an approach of developmental regionalism. This is especially evident with respect to SME development.

Copyright
© 2019 African Export-Import Bank. Publishing services by Atlantis Press International B.V.
Open Access
This is an open access article distributed under the CC BY-NC 4.0 license (http://creativecommons.org/licenses/by-nc/4.0/).

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Journal
Journal of African Trade
Publication Date
2019/09
ISSN (Online)
2214-8523
ISSN (Print)
2214-8515
DOI
https://doi.org/10.2991/jat.k.190812.001How to use a DOI?
Copyright
© 2019 African Export-Import Bank. Publishing services by Atlantis Press International B.V.
Open Access
This is an open access article distributed under the CC BY-NC 4.0 license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - JOUR
AU  - Raphael Kaplinsky
AU  - Mike Morris
PY  - 2019
DA  - 2019/09
TI  - Trade and Industrialisation in Africa: SMEs, Manufacturing and Cluster Dynamics
JO  - Journal of African Trade
SN  - 2214-8523
UR  - https://doi.org/10.2991/jat.k.190812.001
DO  - https://doi.org/10.2991/jat.k.190812.001
ID  - Kaplinsky2019
ER  -