Digest #8: Rethinking Growth: New Paths for a Changing World
Welcome to the first RSS Digest of 2025! We hope you've had a great start to the year.
Global growth is slowing, and the old playbook of export-led industrialisation is no longer a one-size-fits-all solution. As we enter the second quarter of this century, low-income countries—particularly in Sub-Saharan Africa—face the stark reality of a lost decade of growth, while blueprints that once guided economic development are being left by the wayside. With no clear map to navigate the challenges of technological change, global trade fragmentation, and the economic impacts of climate change, the search for a new growth strategy is more urgent than ever.?
This week, we’ve put together a selection of recent papers and reports that explore what economic growth might increasingly look like, shedding light on the directions we could take to build a more inclusive, sustainable, and resilient future.
Interested in tailored insights on the latest analysis in your sector? Get in touch with OTT’s Research Support Service team: Edris Nikjooy .
This piece lays out where growth in emerging economies stands now, with the Washington Consensus and its market-liberalisation blueprint firmly behind us. Without a one-size-fits-all growth model, countries are grappling with challenges like protectionism, shrinking fiscal space, and rapid tech disruptions. It makes the case for experimenting with new strategies, focusing on sectors that drive skilled job creation, boost access to global value chains, and harness technology to stay competitive in an increasingly fragmented global economy.
As countries search for strategies to break free from stagnation, the WEF’s Global Future Council on the Future of Growth makes a strong case for overhauling how we think about growth. They argue it’s time to move on from the slow, harmful patterns we’ve relied on and embrace a model that’s innovative, inclusive, sustainable, and resilient. Highlighting the environmental damage and deep inequalities caused by current approaches, they point to green and digital skills as critical tools to unlock better growth for low-income countries and ensure no one is left behind.
Services Are the New Road to Development, Indermit Gill and Aaditya Matoo in Project Syndicate
With the old manufacturing-led blueprint for growth increasingly being questioned, the World Bank’s Chief Economist makes the case for putting services at the centre of economic development. Services now drive more than two-thirds of global GDP and half of global trade, offering not just economic potential but also benefits like higher-skilled jobs and greater female labour participation. This isn’t about abandoning manufacturing entirely but recognising that services are uniquely positioned to deliver growth and opportunities in today’s digital and interconnected world.
Three smart ways to unlock progress on the big issues in development in 2025, Chief Economists of Development Agencies and Finance Institutes in VoxDev
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As services reshape growth strategies, the question remains how to ensure low- and middle-income countries (LMICs) aren’t left behind in the global economy. Members of the Network of Chief Economists argue that avoiding protectionist industrial policies—even those with green objectives—is key to keeping trade open and giving LMICs a fighting chance to compete globally. They highlight the importance of labour-intensive job creation, alongside building competitiveness and integrating into complex value chains, as crucial steps for unlocking progress in 2025.
Resisting the Temptation of Industrial Policy: Africa’s Strategy in a Shifting World in Global Dynamics in a Year of Domestic Contestations and Political Shifts - Policy Center for the New South (PCNS), ISPI - Istituto per gli Studi di Politica Internazionale (ISPI), Observer Research Foundation (ORF) Annual Trends Report
Building on the global debate about industrial policy, Africa faces a unique set of challenges in deciding its path forward. As our colleagues at PCNS highlight in the Annual Trends Report by three think tanks, PCNS, ISPI and ORF, the continent has largely missed out on industrialisation, with manufacturing exports lagging far behind global peers and heavy reliance on primary commodities leaving economies vulnerable to shocks. They argue that adopting industrial policy could worsen governance issues, foster rent-seeking, and divert resources from essentials like infrastructure and education. Instead, Africa’s focus should be on fixing structural barriers—weak governance, poor infrastructure, and underdeveloped human capital—while maximising the potential of the African Continental Free Trade Area (AfCFTA) to build resilience and compete on the global stage.?
Africa in 2025, Ken Opalo in An Africanist Perspective
For Ken Opalo, 2025 offers a brighter outlook for Africa’s economic potential, with countries like C?te d’Ivoire, Tanzania, Senegal, Benin, and Rwanda leading the fastest-growing economies, thanks to strong drivers like agriculture, hydrocarbons, infrastructure, and logistics. However, as with previous discussions, the full realisation of this potential hinges on addressing governance challenges—such as youth unemployment, political instability, and debt distress—which remain critical to creating the conditions for sustained and inclusive growth.
Building on the need for governance and structural reforms to unlock Africa’s potential, Saadia Zahidi, Managing Director of the World Economic Forum , introduces the Future of Growth Framework, which redefines what “quality growth” should look like. This multidimensional approach balances growth rates with priorities like innovation, inclusion, sustainability, and resilience, highlighting that nearly four billion people live in countries where traditional growth metrics fail to deliver meaningful progress. Zahidi makes the case that by focusing on these deeper indicators, economies can create prosperity that truly benefits people and the planet, rather than simply chasing GDP.
Continuing the focus on quality growth, the World Bank introduces the Global Prosperity Gap, a new indicator that measures how far societies are from achieving $25 per person per day—roughly the income level of high-income countries. This tool highlights the importance of inclusive growth, where the incomes of the poor grow faster than average, as both rising mean incomes and reductions in inequality play critical roles in narrowing the gap. By shining a light on global inequality, the Prosperity Gap underscores the urgency of policies that prioritise shared prosperity alongside economic progress.
What else should we have picked? Comment below with your favourite articles this month.