Wider annual lecture 18: managing structural transformation.

Author:Williamson, Roger

18 December 2014

At the UN headquarters in New York on 18 November 2014, Peter Timmer, emeritus professor from Harvard, showed how the three transformations (structural, agricultural, and dietary) relate to development. He commented on the challenges of food security in Asia and Africa and the impact of climate change on the issue.

Structural transformation

Peter Timmer gave us the benefit of his experience in the analysis of food systems and security, and how they are crucial for structural transformation to take place in the wider economy. As part of the process of structural transformation, labour moves from low-to high-productivity sectors and occupations. Timmer argues that for this to be possible an agricultural and dietary transformation is crucial.

Recent decades have seen rapid economic growth in Asia. Hundreds of millions of people have been lifted out of poverty and hunger as the 'three transformations' occurred. However, when structural transformation fails, as it often has in Africa, it is almost always associated particularly with a failure of agricultural transformation. Labour is pushed out of agriculture into urban slums and the informal sector, rather than being pulled into high-productivity urban jobs in sectors such as manufacturing. If the surplus labour is not needed on farms, but there are only few jobs in manufacturing or other high-productivity employment, people are forced into low-productivity service sector work--not a promising prospect for overall development.

If the new wave of the technological revolution based on information technology does not provide many jobs, it is unclear what work people will do as fewer workers will be required in agriculture. The price of a failed structural transformation is likely to be an uncertain existence in precarious and poorly paid work, with living conditions at subsistence level (at best) and a state stagnating on the development ladder.

Agricultural transformation

The trend towards greater productivity of land and agricultural labour as structural transformation takes place is clearly shown in Figure 2. The more labour-intensive farming of China, Asia and sub-Saharan Africa appears to the left of the chart. The large farm size, mechanization and associated higher productivity of North America, Australia and New Zealand appear to the right. The setbacks from the break-up of the socialist system of the Soviet Union and Eastern Europe are represented as a sharp kink...

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