The Long-Term Game Between Emerging Market Structural Transformation and Productivity Growth: Reshaping the Path from Manufacturing-Driven to Sustainable Development

Emerging markets, as a major engine for global economic growth, have a long-term trajectory deeply dependent on the adjustment and structural transformation of their internal economic structure. Over the past few decades, the driving force behind economic growth has largely depended on the reallocation of labor—that is, structural transformation—which involves the redistribution of economic activity between agriculture, manufacturing, and services. However, assessments of this process show that the contribution of structural transformation to productivity growth is significantly weakening. Research indicates that the contribution of structural transformation to productivity has dropped from 0.58 percentage points annually in the 1990s to only 0.06 percentage points in the 2010s, suggesting that mere structural adjustments can no longer automatically guarantee sustained leaps in productivity.

At the granular level of economic sectors, the position of manufacturing remains irreplaceable. Research confirms a significant positive correlation between manufacturing employment growth and higher productivity growth; every increase in a manufacturing job can bring 1.5 to 1.8 percentage points of productivity growth annually; whereas the structural shift in the service sector does not produce an equivalent effect. This manufacturing productivity driver is a crucial anchor for emerging markets to achieve higher-quality growth.

However, this growth path also brings structural challenges. Particularly in regions like Africa and Latin America, the phenomenon of "premature deindustrialization" has emerged. When there is a significant gap between manufacturing employment and overall productivity performance, it often signals pressure on economic efficiency and inclusive growth. Furthermore, although the expansion of manufacturing helps reduce poverty and income inequality, it also brings the issue of rising carbon intensity, requiring emerging markets to deeply integrate industrial upgrading with environmental sustainability.

Looking ahead, for emerging markets to achieve sustainable structural transformation, what is needed is no longer simple sector rotation, but systematic and forward-looking industrial policy interventions. This means adopting industrial strategies that can rebuild productive capacity, focusing on expanding formal employment, and urgently combining low-carbon technologies, green innovation, and inclusive industrial policies. Only by closely linking the vitality of manufacturing with low-carbon transition strategies can emerging markets achieve more resilient and sustainable long-term development while navigating global economic uncertainties.