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The effectiveness of Morocco’s industrial policy in promoting a national automotive industry

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  • Hahn, Tina
  • Auktor, Georgeta Vidican

Abstract

Since the 1980s, international production patterns have fundamentally changed, creating opportunities for developing countries to integrate into global value chains (GVCs). Morocco, which is among the first countries in the Middle East and North Africa to pursue an export-led economic policy, has used this opportunity, among others, to develop an automotive supplier industry, which became one of the country’s industrial lead-sectors. This paper analyses how industrial policy and industry-level dynamics contributed to the emergence of an automotive supplier industry. We find that, although Morocco achieved its overall goal of establishing such an industry, this industry remains limited to low-value activities. With the aim of deepening the level of integration into GVCs and acquiring a dynamic competitive advantage in the automotive sector, the nature and objective of industrial policy in Morocco has changed in the past couple of years. Instead of focusing primarily on its labour-cost advantage to attract lead-firms to localise in Morocco, decision-makers currently are taking a more systemic approach to industrial policy, focusing on fostering synergies across sectors, creating ecosystems for different parts of the value chain, and using targeted support measures for enhancing workforce capabilities and competencies. We find evidence for a tendency towards the co-design of policy measures by public and private stakeholders, which, if it persists, could lead the way towards a more effective industrial policy. The main challenge for the future of the automotive sector in Morocco lies in a stronger inclusion of local firms in the value chain and a gradual shift towards higher value added. This will require a stronger focus on developing advanced technological skills and a higher level of investment in research and development.

Suggested Citation

  • Hahn, Tina & Auktor, Georgeta Vidican, 2017. "The effectiveness of Morocco’s industrial policy in promoting a national automotive industry," IDOS Discussion Papers 27/2017, German Institute of Development and Sustainability (IDOS).
    • Handle: RePEc:zbw:diedps:272017
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Alain Piveteau, 2020. "The automotive sector in Morocco. Local manifestation of a global dynamic or decisive industrial emergence? [Le secteur automobile au Maroc. Manifestation locale d'une dynamique mondiale ou émergen," Post-Print hal-03021343, HAL.
    2. Markus Loewe & Holger Albrecht, 2023. "The social contract in Egypt, Lebanon and Tunisia: What do the people want?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(5), pages 838-855, July.
    3. Hahn, Tina & Auktor, Georgeta Vidican, 2018. "Industrial policy in Morocco and its potential contribution to a new social contract," IDOS Discussion Papers 31/2018, German Institute of Development and Sustainability (IDOS).
    4. Anthony Harris & Anthony D'Agostino & Sara Litke-Farzaneh & Beryl Seiler & Matt Sloan, "undated". "Morocco Land Productivity Project: Evaluation Design Report," Mathematica Policy Research Reports f3fc788501b64608b17e1cb23, Mathematica Policy Research.
    5. Nizar Becheikh, 2021. "Political stability and economic growth in developing economies: lessons from Morocco, Tunisia and Egypt ten years after the Arab Spring," Insights into Regional Development, VsI Entrepreneurship and Sustainability Center, vol. 3(2), pages 229-251, June.
    6. Rim Ben Ayed Mouelhi & Monia Ghazali, 2021. "Structural transformation in Egypt, Morocco and Tunisia: Patterns, drivers and constraints," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(1), pages 35-61, January.
    7. Auktor, Georgeta Vidican, 2022. "The opportunities and challenges of Industry 4.0 for industrial development: A case study of Morocco's automotive and garment sectors," IDOS Discussion Papers 2/2022, German Institute of Development and Sustainability (IDOS).
    8. El-Haddad, Amirah, 2020. "Redefining the social contract in the wake of the Arab Spring: The experiences of Egypt, Morocco and Tunisia," World Development, Elsevier, vol. 127(C).
    9. Nizar Becheikh, 2021. "Political stability and economic growth in developing economies: lessons from Morocco, Tunisia and Egypt ten years after the Arab Spring," Post-Print hal-03583934, HAL.

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