Industrial Policy: Critical Review

Abstract

Industrial commencement in Ethiopia has begun a nearly century ago, despite this long time experience; it is still in its dismal status. By all measures, the sector is abysmally gloomy. (EEA, 2005). The national share of the sector in every measure is insignificant up until. (Ibid), (Altenberg, 2010), (Melaku, 2013) and (Amare , 2015). By all the measures the sector posited as poor. Poor productivity (Zerihun, 2008); poor export capacity (Gebreeyesus,2009); poor technology; poor technical capability; poor linkages of both-backward and forward(EEA, 2005); poorly balanced and poor in everything even at today. Due to this, the manufacturing sector is one of the least developed in the world. Absence of sound industrial policy would be the main reason for the unhealthy, distorted and unbalanced status of the industrial sector. Sound industrial policy would guide the holistic strategic efforts of a country thereby to enable the development of diversified industrial portfolios.

Thus, in this chapter we intend to appraise the industrial policy set ups and then point out its drawbacks thereby to add any new policy elements. Modification of the industrial policy would really be the base for sustainable industrialization and industrial development. Industrialization is the social process which impinges directly on people’s lives: the way they think and live through changes in technology, environment, and culture etc. (EEA, 2005). Industrial development is the productivity performance improvement.