Drivers of Manufacturing Job Growth 59
Figure 2.19 Côte d’Ivoire: Fixed Assets per Worker, by Manufacturer Size Group, 2003–14
Fixed assets per worker (2010 US$)
16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2003
2004
2005
2006
2007
20 workers or less More than 500 workers
2008
2009
2010
2011
21–100 workers All
2012
2013
2014
101–500 workers
Source: Abreha et al. 2019.
Underlying Factors and Policy Interventions The underlying factors notwithstanding, the broader policy implication of the concentration of job growth in new and young firms is that public interventions for job growth should avoid size-based support schemes. Therefore, two sets of public interventions for promoting manufacturing job growth can be implemented—those directed at lowering barriers to entry and those promoting within-firm productivity growth. Distinguishing between the two types of interventions is important because, on the one hand, policies aimed at lowering entry barriers lead to job growth only because entry boosts aggregate productivity by inducing the reallocation of market share from less productive incumbents to more productive entrants. On the other hand, although the second set of interventions raises industrywide productivity via reallocation of market share from less productive incumbents to more productive ones, it also leads to within-firm productivity growth among incumbents and entrants.
Policy Interventions for Lowering Entry Barriers
Arguably, the most formidable bottleneck to raising rates of entry into existing and new manufacturing industries in economies like those of Côte d’Ivoire and Ethiopia is physical infrastructure for essential services, including transport and logistics, information and communication technology,