structural transformation

Syllable breakdown

Dictionary meaning

the process of economic change in which the composition of a country's output and employment shifts over time from low-productivity activities — typically subsistence agriculture — to higher-productivity sectors including manufacturing, modern services, and knowledge industries; structural transformation is understood in development economics as both a defining feature of the development process and a prerequisite for sustained income growth, following the pattern observed in successful industrialisers from Britain in the eighteenth century to China in the late twentieth; the process requires not only sectoral reallocation of labour and capital but institutional changes in property rights, financial systems, and governance that enable markets to function efficiently and firms to invest in productivity-enhancing activities; in sub-Saharan Africa the pace and pattern of structural transformation has been debated, with some scholars arguing that Africa has undergone premature deindustrialisation — shifting labour out of agriculture into services without the manufacturing stage that generated productivity growth in earlier industrialisers