Agricultural transformation is considered inclusive when the results lead to poverty reduction, increased food security, and improvements in gender equality and women’s empowerment. We begin by presenting the stylized facts of structural transformation across time and space. as the structural transformation process that simultaneously generates productivity growth within sectors and shifts of labour from lower- to higher-productivity sectors, thereby creating more, better-remunerated, more formal, and higher-productivity jobs. In other words, the data shows there was first a period of industrialization as production shifted from agriculture to manufacturing, followed by a period of deindustrialization as production shifted from manufacturing to services.In this blog post we discuss this transition and the drivers of this process of ‘structural transformation’.The analysis in what follows is based mainly on a considerable update of the data provided by Herrendorf, Rogerson and Valentinyi (2014).One way to study the process of ‘structural transformation’ across countries is to track how employment changed among sectors in the economy. It also involves constant improve- ment of tangible and intangible infrastructure that should fit the needs of the emerging indus- tries. Authors: Sara . Measured this way, the changes in production values between any two years will consist of a combination of movements in prices and movements in volumes. A second way to study the structural transformation is to track how output changes across sectors in the economy. Urbanization has progressed ahead of structural transformation in many countries that have not yet transformed agriculture. select article The processes of structural transformation of African agriculture and rural spaces The following visualization shows this by plotting the evolution of the sectoral composition of GDP between 1800 and 2010 for the same rich countries included in the previous chart.We can notice here the broad pattern outlined before: as rich countries developed, the share of GDP in agriculture declined, while the share of GDP in services went up; and in the middle, the relative importance of the manufacturing sector first expanded and then contracted. This post asks how they got there.Although there are many idiosyncrasies in trends, the evidence shows that as rich countries developed, the relative contribution of agriculture to both total employment and GDP declined, while the contribution of services rose in both respects. Most workers in pre-industrial Europe once pursued agricultural work.
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