Industrial Hubs and Technology Transfer in Africa’s Apparel Export Sector

In addition to static benefits, the dynamic benefits of special economic zones (SEZs), in terms of linkages with the national economy outside the zones and technology transfer from foreign to local firms, are crucial for structural transformation. This chapter assesses the extent to which the SEZ or SEZ-like policies and related FDI attraction have led to technology transfer in the leading sub-Saharan African apparel exporters, namely Mauritius, Madagascar, Kenya, Lesotho, Swaziland, and Ethiopia. In doing so, it focuses on local firm-level learning, which underpins technology transfer, and the conditions under which it occurs. It concludes that targeted infrastructure provision of physical zones is important, but that global economy dynamics such as global buyer and foreign investor strategies as well as the complexities related to local firm technological capability building are crucial to understanding technology transfer, arguing for more strategic industrial policies around SEZs.