Employment under vertical and horizontal transfer of concentrated solar power technology to North African countries

Abstract

The process of renewable energy technology transfer to developing countries can influence the industrialization of their economies and the reduction of their greenhouse gas emissions. There are current plans to deploy large-scale solar and wind capacities in the North Africa countries, including the Mediterranean Solar Plan on the public side and the Desertec Industrial Initiative on the private side. We analyse both plans from a technology transfer perspective, drawing a distinction between vertical transfer – in which intellectual property and manufacturing capacity remains in industrialized countries – and horizontal transfer, in which manufacturing and development skills shift to the developing countries. We find that horizontal technology transfer, when 40% and more of all components are manufactured locally, would bring significantly higher number of job-years to North Africans than vertical technology transfer, and that the greatest number of jobs are induced in the service industries. However, the total job creation will still not provide jobs to all unemployed people in the entire region. A case study of Morocco suggests, however, that employment effects could be important for any country that gains a disproportionate share of new investment. Recent policy developments in North Africa show that national governments started to take into consideration possibilities and benefits of horizontal technology transfer by launching plans of industrial development and introducing the rule of local compensation, which foresees a share of components for large-scale projects to be manufactured locally and by North African enterprises.