Economic Structural Transformation in Emerging Market Countries

Abstract

This article analyzes the structural transformation in 30 emerging market countries (E30) on the dimensions of industry, trade, and urbanization. It finds that first, in the agricultural sector, E30 have contributed greatly to the increase of the global agricultural productivity and the transfer of labor force from the agricultural sector to industry or the service sector. However, these countries still feature a high percentage of agricultural employment, which means there is vast room for shifting the agricultural labor force. Second, in the industrial sector, E30 have made remarkable contributions to the world’s industrial development but have also displayed a trend of premature “deindustrialization.” Third, the service sector has picked up speed and gradually turned into a new driver of economic development in E30. Against this backdrop, E30 face the major challenge of how to cope with the premature deindustrialization and smoothly shift the economic growth engine from the industrial sector to the service sector. Fourth, E30 have become an important force in the world trade, with their trade structure switching from simple, primary, low-value-added goods to sophisticated, high-grade, and high-value-added goods and services. However, some emerging market countries are more susceptible to the impacts of the anti-globalization trend because of their high reliance on foreign trade and improper trade structure. Therefore, how to diversify the economy and enhance its economic resilience holds the key to the sustainable economic development of E30. Fifth, E30 have contributed greatly to world urbanization. As urbanization relies more on the service sector than on the industrial sector, it is vital to properly strike a balance between industrialization and urbanization, and between industrialization and service sector development.