Title: The Role of Industrial Policy in Promoting Employment in Ethiopia's Textile and Garment Industry: Evidence from Bole Lemi Industrial Park
Authors: Mesele Mekonen and Workenh Eshatuu Sime (PhD)
Volume: 10
Issue: 7
Pages: 184-196
Publication Date: 2026/07/28
Abstract:
Industrial policy has become a strategic instrument for promoting industrialization, employment generation, and structural transformation in developing economies. This study examined the effectiveness of industrial policy in enhancing employment generation, job quality, and employment sustainability in Ethiopia's textile and apparel industry, with particular emphasis on Bole Lemi Industrial Park. A mixed-methods research design was employed, integrating quantitative survey data collected from 225 employees with qualitative interviews conducted with industrial park administrators and human resource managers. Quantitative data were analyzed using descriptive statistics and multiple regression analysis, while qualitative data were examined through thematic content analysis. The findings indicate that industrial policy has made a significant contribution to employment creation by attracting investment through tax incentives, infrastructure development, and investment facilitation measures. However, the increase in employment has not been matched by comparable improvements in job quality. Employees reported concerns regarding low wages, limited opportunities for skills development, inadequate job security, and unfavorable working conditions. The study further identified several structural challenges affecting sustainable employment, including unreliable infrastructure, foreign exchange shortages, weak domestic supply chain linkages, rising production costs, and inconsistent policy implementation. These constraints reduce firm competitiveness and limit the long-term effectiveness of industrial policy. The study concludes that although industrial policy has successfully expanded employment opportunities in Ethiopia's textile and apparel sector, its long-term developmental impact depends on improving the quality and sustainability of employment. Accordingly, the study recommends strengthening workforce skills, improving policy consistency, enhancing industrial infrastructure and logistics, promoting stronger linkages between industrial parks and domestic suppliers, and addressing foreign exchange constraints to improve industrial competitiveness and support sustainable employment growth.