Technological Learning and Industrialization in Ethiopia

Ethiopia has been one of the world’s fastest-growing economies since 2003. This success has been achieved largely through public investment in infrastructure and agricultural productivity. Building on these accomplishments, the country has embarked on an ambitious programme of export-led industrialization anchored in the manufacturing sector. An important prerequisite for success is the ability of countries and their firms to engage in constant technological learning and to acquire new technologies—technologies essential to the production and export of high-quality products. This chapter reviews the process of technological learning and upgrading in Ethiopia and assesses whether the country is accumulating the technological capability needed for export-led growth. It argues that while recent growth has generated momentum for knowledge accumulation, the gap with competitor countries remains wide. It also identifies the main channels and drivers of technology transfer and technological learning in Ethiopia. Trade and FDI are singled out as crucial.