2. Structural Change and Economic Development

Coordinator: Neil Foster-McGregor

While ideas relating structural change to economic development are not new, they are increasingly relevant in a world in which new forms of structural change impact upon our ability to meet the Sustainable Development Goals (SDGs). The traditional view of structural change as involving a shift of resources across broad sectors has been augmented by new forms of structural change that involve reallocation across firms, tasks and occupations. These new forms of structural change are driven by a host of factors and impact on many of the SDGs, most notably those related to economic growth, labour markets, inequality and the environment.

Research within this theme addresses the causes and consequences of structural change, providing an evidence base to maximise the role of structural change in achieving the SDGs. The causes of structural change are diverse, with prominent examples being Global Value Chains and new technology. New technologies associated with the 4th Industrial Revolution, for example, offer significant potential in raising growth and general living standards worldwide but pose a risk of negative labour market developments and the danger of exacerbating within and between country inequality.

The consequences of structural change are captured through the identification of long-run development trends and identifying the impacts of these trends on a range of socio-economic outcomes. An important component of the research undertaken within this theme is devoted to an understanding of the socio, economic and technological restrictions that can impede the process and beneficial impact of structural change.

The research approach is a diverse one, covering new growth theory, with its emphasis on the accumulation of knowledge as a driver of long-run growth, evolutionary economics, which emphasises the role of path dependence, and neo-institutional economics, with its emphasis on the variety of institutional features and processes that may support the development process. Research within the theme exploits diverse sources of data to address the causes and consequences of structural change for economic development.


    Ongoing projects include:

    • The Greater Mekong Subregion Economic Cooperation Program – This project supported by the Asian Development Bank seeks to identify a new strategic plan (2022-2030) for the GMS programme; a programme supporting regional investment, cooperation and integration within the six countries forming the GMS (i.e. Cambodia, China, Laos, Myanmar, Thailand, Vietnam). UNU-MERIT will contribute to the analysis of industrialisation upgrading and diversification possibilities in the region.
    • The Future of Industrialisation: The Technological Landscape – This project provides background research for UNIDO’s forthcoming Industrial Development Report (2020) that addresses the future of industrialisation in a world of new technologies. UNU-MERIT is providing a mapping of the development, production and use of these technologies in the global economy.
    • New Perspectives on Structural Change: Causes and Consequences of Structural Change in the Global Economy – Continuing its long-standing collaboration with UNIDO, UNU-MERIT is publishing an extensive volume on new directions in research on issues of structural change. The volume is to be published by Oxford University Press and should be published in early 2020.

    Examples of ongoing PhD projects:

    • Tertiarisation, Sectoral Structural Change and Economic Performance in Africa, Solomon Owusu
    • Do Domestic Firms Learn from International Traders? Assessing the Impact of Global Value Chains in the case of Brazil, Caio Torres Mazzi
    • What is the Potential of Natural Resource based Industrialization in Latin America and the Caribbean (LAC)? The case of Extractive Sectors, Beatriz Calzada Olvera
    • Premature Deindustrialization and Structural Transformation in Africa, Emmanuel Mensah

    Examples of completed research projects and topics include:

    • Indonesian Industrial Policy – UNU-MERIT contributed to this Asian Development – Bank sponsored report for the Indonesian Ministry of Planning (2018-2019). UNU-MERIT contributed to the reported by providing an analysis of, and possibilities for, upgrading and diversification within Indonesian manufacturing.
    • UNIDO Industrial Development Report 2018 – UNU-MERIT contributed background papers for the 2018 UNIDO Industrial Development Report. The report focussed on the role of demand and the structure of demand in driving industrialisation, with UNU-MERIT’s contribution considering the role played by foreign demand in the industrialisation process.
    • Asian Development Outlook 2016 – UNU-MERIT provided an analysis of the potential productivity growth of a set of Asian countries, providing in particular an estimate of the importance of structural change for potential productivity growth in Asian economies.
    • UNIDO Industrial Development Report 2016 – UNU-MERIT took the lead in developing and writing the 2016 UNIDO Industrial Development Report, the topic of which was the role of technology and innovation in inclusive and sustainable development.

1. Economics of Innovation and New Technologies
2. Structural Change and Economic Development
3. Economic Complexity and Innovation
4. Governance and institutions
5. Innovation and Entrepreneurship for Sustainability Transitions
6. Migration and Development
7. Social Protection
8. Population, Development and Labour Economics