Industrialization and urban socio-economic dynamics next to a primate city: The case of three Ethiopian cities

Industry development is among the key productive sectors the Government of Ethiopia (GoE) identified to attain middle-income country status. Despite multiple interventions, the sector remains underdeveloped, unable to contribute towards the desired structural transformation of the economy, while its development process has produced more challenges. Based on political economy and urban sustainability livelihood frameworks, this article examines the industrialization process and its socioeconomic outcomes in three cities - Galan, Dukem, and Bishoftu. A household survey, key informant interviews, and document review were conducted to collect the necessary data, and the information gathered was analyzed using multivariate analysis techniques. The dominant variables considered by the communities regarding the outcome of the industrialization process were generated using Principal Component Analysis (PCA1). The findings indicate that the ongoing industrialization process in the three cities has resulted in various ramifications on livelihood and sustainable development, casting doubt on the catalytic role of industrialization. Even though the proximity of the cities to the capital, Addis Ababa, has contributed to urbanization through investment expansion, the PCA2 results reveal that proximity to the primate city is adversely linked with urban development. Besieged by haphazard settlement patterns and irregularities in land administration, the emphasis on industrialization has been detrimental to the quality of the urban environment as well as to the life of residents. The article concludes that investment decisions should consider improving communities' livelihood to manage urbanization and industrialization properly; thus, macroeconomic policies, including industrial policies, should pay attention to local communities' socioeconomic activities and well-being.