Vijaya Ramachandran is senior fellow at the Center for Global Development (CGD). Prior to that, she worked at Georgetown University, in the Africa Private Sector Group of the World Bank and in the Executive Office of the Secretary-General of the United Nations.
Although Sub-Saharan Africa is increasingly attractive to investors, structural transformation and formal job growth remain slow. Industrial surveys in many countries show that some highly productive firms co-exist with many low-productivity businesses. Why do these “productivity islands” not diffuse more rapidly to create the “missing middle”? Our research (pdf) suggests three important factors.