For decades, governments worldwide treated manufacturing as the surest path to mass employment.
That assumption is now unravelling as artificial intelligence, automation and machine learning are transforming production, sharply reducing the work force needed on factory floors.
For countries like Malawi, the implications are increasingly unavoidable.
This is not a future problem driven by new technologies. A 1981 World Bank assessment on the development of Malawi’s manufacturing industry warned that industrial growth would struggle to generate jobs at scale.
The report highlighted a narrow industrial base, dependence on imported inputs, limited domestic demand, and production structures poorly matched to Malawi’s labour-abundant economy. Manufacturing expanded, but employment gains remained modest.
Over 40 years later, World Bank analyses, including the Malawi Economic Monitor, show that manufacturing still employs only a small share of the workforce, while most Malawians remain trapped in low-productivity activities.
The promise that factories would absorb growing numbers of job seekers has proven elusive.
Leading development economists now openly question whether manufacturing can still play the role it once did. Dani Rodrik has argued that many developing countries, including Malawi, are experiencing “premature deindustrialisation,” where manufacturing peaks at much lower levels of employment than in the past, partly because technology has made production more capital- and skill-intensive.
Joseph Stiglitz, meanwhile, has stressed that economic strategies amid rapid technological change must focus on learning, human capabilities and inclusive growth, where human labour remains central and difficult to automate.
In the AI era, economic transformation no longer guarantees mass employment. Growth can occur without jobs.
For Malawi, this reality does not overturn a once-successful model—it reinforces structural weaknesses identified decades ago.
If manufacturing cannot serve as Malawi’s main employment engine, what can?
Two sectors often treated as secondary—education and tourism—deserve a central place in Malawi’s economic strategy.
Both are inherently human-intensive, geographically inclusive, and resilient to automation.
In a world where technology is reshaping work, jobs will increasingly come not from machines replacing people, but from people doing what machines cannot.
Tourism’s contribution includes direct jobs in hotels, leisure and transport.
It also offers indirect jobs in supply chains and related services.
Currently, it is reported to account for six to seven percent of total employment.
Education’s share is harder to isolate, but both sectors already rival manufacturing, which has declined to around seven percent.
Unlike manufacturing, they are not shrinking.
Education and tourism can serve as durable employment anchors amid AI, but only if supported by coherent policy choices.
This requires actively managing macroeconomic and fiscal risks that undermine investment and hiring; prioritising job quality alongside job numbers to avoid entrenching low-wage, insecure work.
It also requires aligning education and skills systems with the evolving needs of both sectors while treating technology as a complement to enhancing productivity rather than displacing workers and building resilience against external shocks, including climate change and global economic volatility.
Without such an approach, education and tourism risk functioning merely as low-wage safety valves, absorbing labour without delivering sustained, inclusive growth.
Manufacturing once promised to absorb Malawi’s growing labour force, but that promise has faded. The country must now look to sectors where human labour is indispensable or irreplaceable by machines.
Education and tourism are central to building an economy that grows with its people rather than apart from them.
As Rodrik argues, many developing countries face premature deindustrialisation, where manufacturing no longer delivers the broad-based employment it once did, making labour-intensive services critical for inclusive growth.
Joseph Stiglitz emphasises that in an era of rapid technological change, development strategies must prioritise human capital, learning and skills that complement rather than compete with machines. Together, these perspectives reinforce the case for positioning education and tourism at the heart of Malawi’s employment-led transformation, ensuring that economic progress translates into meaningful, resilient jobs for its people.
