Industrialization and the Low-Level Production Trap: Handtools and Cutlery in Kenya

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Periodical article

Title:	Industrialization and the Low-Level Production Trap: Handtools and Cutlery in Kenya
Author:	Kerre, Hassan O.
Year:	1988
Periodical:	Eastern Africa Economic Review
Volume:	4
Issue:	2
Pages:	40-48
Language:	English
Geographic term:	Kenya
Subjects:	industrial development tools Development and Technology Economics and Trade
Abstract:	This study of the Kenyan handtools and cutlery industry illustrates how Third World countries are enmeshed in a low-level production trap - low production, high per-unit costs, high prices, and low sales - though plagued by excess capacity. Statistics and simple graphs of the economics of producing machetes, shovels and hoes in Kenya portray the dilemma. Despite possibilities to achieve economies of scale by selling at the long-term average cost and, thereby, capturing the local market, local firms lack sufficient risk capital to endure the consequent short-term losses. Government policy could turn this dilemma into a boon by identifying and protecting such potentially efficient industries. Bibliogr., notes.