Not All Manufacturing Is Created Equal

Developing country governments typically want to promote manufacturing and de-emphasize agriculture. One of the concepts I teach in my development classes is the importance of backward and forward links.  For example, the creation of a railroad may have positive spillover effects on anything from commerce & transportation (forward links) to steel manufacturing (backward link).  If a government wants to promote a particular industry, it is wise to look for one that has widespread potential links, because not all manufacturing is created equal.

This was brought home to me recently by the great satirist Elnathan John, who regularly excoriates the Nigerian government (as well as many others).  He tweeted:

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I can tell you from experience that Import Substitution Industrialization is not a subject that is ripe for comedy, so kudos to Elnathan John for this.  I can think of some positive backward links to creating arms but not many good forward ones!

p.s. This reminds me of an instance when I asked students once on a midterm to choose an industry that would likely have a lot of links to other sectors and one student chose the unlikely industry of fighter jets.  Again, the backward linkages are clear (steel, airplane part manufacturing, aviation schools) but the positive links…not so much.  Not all midterm answers are created equal either!