Importance Of Industrialization

Industrialization has significant role in the economic development. The essential role of industrialization in an economy is as to (i) Raise income: -industrial development can provide a good basis for a rapid growth of income; (ii) fulfill the demands for the industrial products. After certain limits, the demand for people are usually of industrial goods;(iii) Raise productivity per-head (physical output per man): with a higher productivity in industry compared to agriculture, a rise in share of industry in total output raises, the average productivity of the economy as a whole.(iv) Develop economies that become nationally integrated, flexible and capable of self-generated and self-sustained growth as a source of dynamism, and it brings

Manufacturing is a wealth-creating sector of an economy, and closely connected with engineering and industrial design in which it provide important material support for national infrastructure and development. It involves the mechanical or chemical transformation of materials or substances into new products. It makes products from raw materials by the use of manual labour and/or machines and is usually carried out systematically with a division of labor. In a more limited sense, manufacturing is the fabrication or assembly of components into finished products on a fairly large scale. Manufacturing Establishments that transform materials or substances into new products by hand or in the worker's home and those engaged in selling to the general public products made on the same premises from which they are sold, such as bakeries, and pastries may also be included in the manufacturing sector. They either process materials themselves or contract with other establishments to process their materials for them (Central Statistical Agency of Ethiopia,

For example, average capacity utilization of the textile, leather, agro-processing and pharmaceutical industries in 2009/10 was at 40pc, 10pc, 60pc and 30pc, respectively. The manufacturing industry has neither transformed itself to high tech processing nor is competitive in the international market. Ethiopia ranked 121 out of 144 countries, according to the recent global competitiveness index. The sector has persistently faced high production cost, severely constrained supply and poor quality raw materials and technology, both mainly imported, witnessing little improvements in the main areas of challenges over the years. The contribution of the sector for gross domestic product (GDP) is stagnated at less than five per cent for the last 20 years. Exiting technology transfer mechanisms are poorly institutionalized. (Reimagining Ethiopian Manufacturing