A STUDY ON THE DYNAMIC ECONOMIC IMPACTS OF INDUSTRIAL PARKS IN ETHIOPIA: THE CASE OF HAWASSA INDUSTRIAL PARK

Abstract

Industrial parks have of paramount importance in enhancing industrial development and national socio-economic advancement. However, the existing empirical researches on the immediate economic impacts of IP are mixed. Besides, there are no sufficient empirical studies conducted, in developing countries like Ethiopia, regarding these dynamic impacts. Therefore, the main purpose of this research was to study the immediate or dynamic economic impacts of IPs in Ethiopia and to identify the main challenges the employees and enterprises resided in Hawassa Industrial Park (HIP) have faced and discuss their implications, taking HIP as a unit of analysis. For this research purpose, a pragmatist research philosophy was followed and a mixed concurrent triangulation strategy was employed to answer the research questions and address the study objectives. This is mainly an exploratory research in nature. To gather pertinent information, both primary and secondary sources of data were used. From 389 total questionnaire distributed to the sample respondents, only 337 (86.6) were properly filled and returned. To triangulate and substantiate the information collected through questionnaires, semi-structured interviews were conducted with key informants. Besides, intensive document analysis was conducted. The data collected from different sources were analyzed mainly using descriptive statistics and content analysis method. The findings of the study revealed that HIP has created jobs for thousands of workers and it has realized employment creation impacts. However, the park’s achievement in this regard fell short of the target by a significant margin. Concerning skill upgrading, the study disclosed that the park’s role in the acquisition and upgrading of the local workers’ skills was minimal. With regard to the revenue generation impact, the study revealed that HIP has generated a large quantity of financial income from its manufacturing enterprises in the park. Besides, the analysis of replies from diverse sources indicated that the employees who have been working in HIP and the enterprises in the Park have encountered major challenges in their operations. Therefore, to improve the parks’ competence and capacity to uphold its efforts more effectively and succeed in achieving its objectives, the researcher strongly recommend for policy makers to expand the park and increase employment opportunities for the local employees. Besides, it is recommended that the Park management in collaboration with the EIPDC, EIC, and other stakeholders must be determined and solidly work to raise inland and export revenues. Moreover, to upgrade the skills of the local workers and build their human capital, the Ethiopian government and the HIP should provide intensive, technical, and full-fledged trainings to its local workers targeting the skills formation of the employees. In general, the federal and regional governments must strive to curb the challenges the employees and the enterprises resided in HIP have been facing.