By now, most us are familiar with the Africa ‘rising’ narrative; over the last 15 years, many African economies have grown at breakneck speed, turning around the dismal performance of the 1980s and 1990s. Yet, very few African firms have become internationally competitive. Africa remains the world's least technologically developed region, with a negligible industrial base. Why is this, why is industry important and what can be done about it? That is what this book is about.

The book is divided into four parts. Part I discusses why industry matters for Africa. Part II (Chapters 2 and 3) traces Africa's industrialisation efforts and outcomes since the 1960s, and thereafter moves on to the current global economic landscape, considering new challenges and opportunities for breaking into industry. Part III (Chapters 4, 5 and 6) looks at three key drivers of firm-level productivity in low-income countries – exports and competition, firm capabilities and industrial agglomerations – and analyses their relevance to Africa's industrial development. Part IV (Chapters 7, 8 and 9) examines policies needed for achieving industrial competitiveness, both from the perspectives of African governments and donors.

It is especially in the last five years that the need for structural transformation in Africa has started to reappear on the development agenda. In addition to this book spearheading the issue, international organisations have shifted their focus to it. While serving as Chief Economist of the World Bank, Justin Lin conducted a project studying light manufacturing in Africa. The UN Economic Commission for Africa now regularly publishes work that emphasises the need for industrial competitiveness. Economist K. Y. Amoako has established an African Centre for Economic Transformation (ACET).

But this book in particular has some novelty; it is based on a research project (Learning to Compete: L2C) spanning many years and involving national researchers in 11 countries – nine in Africa and two from emerging Asia. The book is mainly a story about firms, and it's especially the case studies of these firms that bring clout to some of the book's findings. For example, it has become well established that industrial agglomeration is an important source of raising firm-level productivity. But in low-income countries, we don't see that much agglomeration; and the L2C case studies help shed some light on this. Looking at firms in Ethiopia and Cambodia, the authors find that firms often face a price-productivity trade-off in the choice of clustering – clustering results in productivity gains, but in low income countries, markets tend to be localised (meaning that firms serve markets in a limited geographical area), and in these markets, entry of new firms results in fierce price competition. This may result in price reductions, thus disincentivising agglomeration.

My favourite part of the book was the one on policy (Part IV), which came across as more comprehensive than in comparable publications. Many of the authors are (or have been) involved in the donor community, and have first-hand experience of the challenges faced by donors and African governments. The policy solutions reflect this, and are impressively detailed, particularly in the chapter on aid. For example, in the section ‘Supporting the Export Push’, the authors put ‘Aid for Trade’, a donor initiative conceived at the 2005 Hong Kong WTO Ministerial Conference, under a critical lens. The Aid for Trade umbrella is very broad, so the authors argue that it is close to impossible to link the aid to meaningful impacts. They call for a stronger link between Aid for Trade and improvements in infrastructure and skills that impact export performance. Noting that there is a widely accepted measure for trade logistics performance published by the World Bank, the authors suggest that donors agree to align aid commitments with specific infrastructure components of the trade logistics index. In this way, it would be easier to see whether donor assistance is directed at the critical logistical constraints to exports.

However, in certain chapters, important theories were neglected. Chapter 1, ‘Why Industry Matters for Africa’, presents Africa's manufacturing deficit, and shows how higher income countries tend to have more manufacturing (and more diversified and eventually more sophisticated manufacturing) than lower income countries. But surprisingly, there is little analysis of why manufacturing tends to be a stronger driver for productivity growth than, say, agriculture, extractive industries or services. This chapter should arguably have included a discussion on Kaldor's growth laws, the Prebish–Singer hypothesis, and more recent debates on whether or not services can be a new route to developing productive capabilities (i.e. are we moving into a post-industrial age?).

Furthermore, I was missing a more critical take on (1) Africa's recent growth performance and (2) participation in global value chains and FDI. With respect to the first, the authors point out that Africa has experienced economic growth without much structural change. However, if they looked at per capita figures, they would find that Africa's annual economic growth has in fact been no more than two per cent on average since 2000, which is hardly impressive. As for the second point, I found the authors' encouragement for African countries to participate in global production networks (trade in tasks) and attract foreign investors – two largely related points – to be overly optimistic. Assembly tasks for foreign companies do indeed bring about short-term benefits, including job creation and export earnings. But experiences from Latin America (like Mexico and the Dominican Republic) show that without policy interventions to induce technological spillovers from foreign firms, countries can get stuck in low-value added activities, creating little or no linkages to the domestic economy, doing simple assembly tasks within the enclave of an export processing zone.

Despite some shortcomings, the book is well structured, and is written in a way that serves a broad readership – which indeed the authors state as their aim. Most importantly, it puts industrialisation back on the development agenda, which, in Africa, it desperately needs to be.