Working Paper 336 - Jobs, Economic Growth, and Capacity Development for Youth in Africa

The rapid growth of its population presents both opportunities and challenges to the African continent. In order for the demographic dividend to be harnessed, African countries' youthful populations need to find productive work. Unfortunately, labour market outcomes on the continent tend to be relatively poor, and while there has been a shift towards the services sector as a potential engine for future economic growth, development and— critically—jobs, it is debatable as to whether the services sector can generate jobs of the quantity or quality required to raise incomes. In this paper, we argue that the economic complexity framework, with its associated mapping of products within the product space, provides a useful lens through which to view industrial policymaking. By focusing more narrowly on specific products identified through the economic complexity methodology, it is argued that policymakers can be presented with a more targeted menu of policy recommendations aimed at resolving very specific problems within economies. By successfully addressing capability constraints, policy can have a potentially greater impact on the accumulation of capabilities and economic diversification, unlocking the potential of manufacturing as a source of economic dynamism and job creation.