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Countries, 2014
Figure 5.1 Number of Workers in GVCs, by Sector of Employment, in Sub-Saharan Africa and
Benchmark Countries, 2014
100
90
Share of total GVC employment (%) 80
70
60
50
40
30
20
10
0 Ethiopia Senegal KenyaSouth Africa VietnamIndonesia India BrazilBangladesh China Malaysia Manufacturing Agriculture Services
Source: Pahl et al. 2019. Note: Countries are ranked by manufacturing share of global value chain employment. Agriculture includes fishing and forestry. Services are all other sectors of the economy. The coverage of manufacturing differs by country. For Bangladesh and Ethiopia, it covers all establishments with 10 or more employees; for Kenya, data pertain to establishments with 5 or more persons engaged; for Malaysia, Senegal, South Africa, and Vietnam, the scope of the data is all registered establishments. Data for Brazil, China, India, and Indonesia include all manufacturing firms (formal and informal).
(27 percent) in South Africa. The total number of jobs in GVCs in the services sector was about 586,000 (18 percent) in Ethiopia, 395,000 (20 percent) in Kenya, 55,000 (21 percent) in Senegal, and 1.3 million (45.6 percent) in South Africa. Between 2000 and 2014, more GVC jobs were generated in the agricultural sector in Ethiopia and Kenya, adding 691,000 and 471,000, respectively. In contrast, the number of jobs in the sector declined by 78,000 and 318,000 in Senegal and South Africa, respectively. In comparison, during the same period, jobs created in agriculture through GVCs declined by 673,000 whereas the number of jobs in manufacturing increased by 28 million in China. In Bangladesh and India, job creation in GVCs increased in all sectors but was highest in the manufacturing sector (Pahl et al. 2019).
Although the emphasis here is on job growth in manufacturing, it is noteworthy that the distinction between services and manufacturing
activities has become increasingly blurry, given that GVC jobs in services may include workers involved in activities auxiliary to manufacturing, such as business processing services, communications, transport, finance, and aftersales services.1
Through participation in GVCs, job growth in the manufacturing sector in Sub-Saharan African countries has benefited from the expanding global demand for manufactured goods in the world economy. Between 2000 and 2014, global demand added 1.69 log points to manufacturing GVC job growth in Ethiopia.2 In Kenya, Senegal, and South Africa, respectively, it added 0.89, 0.63, and 0.46 log points to GVC job growth.
However, the boost to job growth through participation in GVCs in Sub-Saharan Africa as well as in comparator countries has been weakened by two proximate cause factors: (1) the decline in competitiveness and (2) the decline in the labor requirement needed per unit of output arising from the adoption of labor-saving technologies to replace routine production jobs along GVCs (Pahl et al. 2019). The decline in labor demand in the execution of activities along GVCs reduced job growth by 0.25 log points in Senegal, 0.35 log points in South Africa, and 0.44 log points in Kenya (figure 5.2). In contrast, labor requirements in manufacturing went up by 0.34 log points in Ethiopia. The decline in labor requirements experienced in some of the countries was plausibly due to the quite advanced level of the manufacturing sector in these countries around 2000, such that further increases in productivity were minimal relative to improvements made in the nonagricultural sectors to which the manufacturing sector had backward links (Pahl et al. 2019).
In addition, Ethiopia, Kenya, Senegal, and South Africa lost market share in global competitiveness, which further depressed the creation of jobs within GVCs. Similarly, countries such as Brazil and Malaysia were barely able to increase job growth through improvement in competitiveness with respect to participation in GVCs.3 In contrast, other developing countries, such as Bangladesh, China, Indonesia, and Vietnam were able to improve GVC competitiveness to boost job growth (figure 5.2).
The share of value added in GVCs has increased in a host of countries in SubSaharan Africa as a result of specialized and more diversified baskets of manufacturing industries. For example, between 2000 and 2014, the global share of manufacturing value added in GVCs in Ethiopia increased by 2.5 percent (the most in Sub-Saharan Africa) and in Kenya by 1.7 percent. Other countries have had different experiences, as value-added shares in GVCs have not been growing fast in Senegal and declined in South Africa. Among the comparator countries, the global share of GVC income in China and Vietnam quadrupled during the same period. Countries such as Bangladesh, Brazil, Indonesia, India,
