Firm linkages in the Tanzanian metal sector
The full title of this project is ‘Firm Linkages in a Rising Resource Based Economy’, which focuses on the role of SMEs and firm linkages in the metal sectors in Tanzania. It is part of a larger project: ‘From the Bottom Up: Firm Capabilities in the “In Between” Sector in Tanzania’, funded by the International Growth Centre from July 2015. CAS’ contribution is led by Dr Hazel Gray, in collaboration with Professor Maggie McMillan (Tufts University) and Richard Ngliangwa of the Economic and Social Research Foundation in Dar es Salaam.
Why look at firm linkages now?
The production of iron and steel has increased dramatically in Tanzania over the past decade. This has led to a revival of the fabrication of metal products, in which small and micro-firms play a central role. With expanding employment and output generated by larger firms, SME activities are also expanding rapidly but we know little about the quality and dynamics of this growth.
The expansion of metal manufacturing is of particular policy relevance for the Tanzania government, in its efforts to increase the local content within supply chains to the rapidly growing natural resources sector. How local content relates to economic transformation depends in turn on the extent and nature of such linkages.
There are three key research questions:
- What linkages exist betwen large firms and SMEs in the metals sector?
- What are the major characteristics of these linkages?
- How have these linkages changed over time?
- What are the implications of these linkages for product innovation in SMEs in the sector?