Manufacturing Exports and Employment Growth

by DAVIES, R. , 2006
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

Davies considers the role of manufacturing exports in creating employment. It looks at the potential and limitations of the sector itself, and also its interaction with other sectors. He assesses where export growth might occur, and the contribution of different sectors to such growth, given their labour intensity, backward and forward linkages, and export dependence. It looks at how growth is spread throughout the economy via linkages to other sectors, using an economy-wide model to explore the employment consequences of various changes to exports. The aim is to understand the processes involved in employment responses to different export growth patterns. This initial research shows that the impact of economy-wide export growth depends crucially on its underlying cause and on how the macro economy is managed. Growth in one sector could have both positive and negative effects on another sector, depending on the relationship between the two. The combined impact of simultaneous growth in several sectors could be greater or smaller than the sum of their individual impacts. This suggests a need for a better understanding of ‘export clusters’, so that policies can address them jointly.