Tales from the Development Frontier: How China and Other Countries Harness Light Manufacturing to Create Jobs and Prosperity

Despite widespread agreement among economists that labor-intensive manufacturing has contributed mightily to rapid development in China and other fast-growing economies, most developing countries have had little success in raising the share of manufacturing in production, employment, or exports. Tales from the Development Frontier recounts efforts to establish light manufacturing clusters in several Asian and African countries, looking in particular at China. A companion volume to Light Manufacturing in Africa―which laid out a strategy for injecting new industrial growth nodes into African economies―Tales from the Development Frontier focuses on the six main binding constraints to competitiveness that nascent light manufacturing industries must overcome in developing countries: the availability, cost, and quality of inputs; access to industrial land; access to finance; trade logistics; entrepreneurial capabilities, both technical and managerial; and worker skills. The volume systematically explores potential growth opportunities in light manufacturing in a carefully selected subset of industries: agribusiness, apparel, leather goods, wood-working, and metal products. It specifies the constraints that need to be addressed before local and international entrepreneurs can take advantage of the latent comparative advantage available to many low-income economies in the target industries. It also proposes policies to ease the constraints―policies that can open the door to rapid increases in industrial output, employment, productivity, and exports. The outcomes described in this volume include both inspiring successes and miserable failures in addressing the binding constraints in the identified sectors. These examples reveal how and why industrial development efforts in poor countries―where, by definition, underlying conditions are far from ideal―can accelerate growth. Most of the firms described in a series of case studies started from a very simple and modest base in an environment full of seemingly insurmountable obstacles. With its rich array of new material, this book will support the ongoing research of policy analysts focused on China and other developing countries. Above all, the volume aims to embolden business entrepreneurs and government officials in low-income countries to pursue newly emerging opportunities to expand and accelerate the growth of light manufacturing in their home economies.

'Tales from the Development Frontier' is an important contribution to our understanding of the role of public policy in industrialization. Drawing on detailed analytical narratives, it provides new insights into China's recent rise as a manufacturing powerhouse and a thoughtful assessment of the challenges faced by other low income countries as they seek to emulate its industrial success. This is a must read for economists and policy makers interested in industrialization and economic development. --JOHN PAGE, Senior Fellow, Global Economy and Development, The Brookings Institution

There are many studies of the broad strategies that China has pursued to achieve rapid development and an equally rapid expansion of its international trade, but few have gone into great depth on just what was and was not critical to China's performance in the key industries that led this effort in its early stages. Tales from the Development Frontier fills this important gap with careful case studies of the challenges that particular industries faced and what the government did and did not do to facilitate those efforts. Comparisons with similar industries located in Africa provide helpful guidelines for African reformers and they also enrich our understanding of the Chinese experience. --DWIGHT H. PERKINS, Harold Hitchings Burbank Professor Emeritus of Political Economy, Harvard University

This book is a treasure trove of cases for anyone concerned with private sector development. By juxtaposing China's experience with stories from across the developing world, it offers a fresh and welcome perspective on the design of effective policies. --JOHN SUTTON, Sir John Hicks Professor of Economics, The London School of Economics