3 employment in the formal sector where they could make a decent living and hope to be part of the dynamics of industrial and technological upgrading that eventually brings prosperity. That is true even in countries that have recorded high growth rates but where the number of poor has not declined significantly.

The need for sustained, inclusive growth has never been more urgent. The growth dividends have not materialized for many people, who are getting impatient. Fortunately, new opportunities for rapidly achieving more broadly shared economic success are on the horizon. Globalization and the continued progress of large emerging economies such as China, India, Brazil, and a few others, are freeing up unprecedented possibilities for industrialization for low-income economies in Africa and elsewhere. The popular belief that economic progress in these large developing countries (China in particular) is hurting industrialization in lower-income regions such as SubSaharan Africa is wrong. In a global economy of 7 billion consumers and counting, trade of manufacturing goods is not a zero-sum game. In fact, with the constantly enlarging global market for manufacturing goods, the ―pie‖ keeps growing bigger and any developing country could find its niche—provided that it specializes in the production of goods that are consistent with its comparative advantage and implement policies that ensure the rapid development of competitive domestic firms. The upcoming ―graduation‖ of large emerging economies into high middleincome status actually opens up new opportunities for Africa. Confronted with the challenge of rising wages, even for unskilled workers, these successful middle-income countries will soon become uncompetitive in low-skilled, labor-intensive industries that have driven their good economic performance and will be forced to either relocate such activities in lower-wage countries, move up the value chain, or switch to more complex and capital intensive industries where they still have comparative advantage. It is estimated for instance that China alone may have to relinquish most of its current 85 million manufacturing jobs (Lin 2011a).

African countries are well placed to seize the benefits of such a once-in-a-generation opportunity. In order to do so, they must organize themselves to fill at least some of the industrial void that China, India, Brazil and others will leave behind as they move up the industrial and technological ladder. It is therefore important to identify the policy and institutional constraints that must be removed for their industrialization strategy to be implemented.

# **3. RATIONALE FOR CLUSTER-BASED INDUSTRIAL PARKS**

The traditional policy advice given to African countries by the World Bank and most development institutions is to get their macroeconomic policies right and improve their business environment through microeconomic, sectoral and institutional reforms. The pertinence of such advice is undisputable. But evaluation studies often show that many countries have not followed that advice, often because it would have required engaging some politically difficult reforms. Even some of those that have followed it have not been able to accelerate and sustain inclusive growth of the type observed in the truly successful countries identified in the 2008 _Growth Report_ .<sup>3</sup> While growth rates of 5-6 percent are certainly remarkable, they are insufficient to bring

> 3 The report identified some of the distinctive characteristics of 13 high-growth economies that have been able to grow at more than 7 percent for periods of more than 25 years since World War II. The list includes: Botswana;