Diplomacy & Defense Think Tank News

Public procurement expenditures of European Union (EU) member states are enormous, accounting for approximately 14 per cent of value creation in the EU. In many European countries, municipalities are responsible for a large share of these expenditures, as is the case in Germany. By integrating sustainability criteria in tenders for goods, works and services, municipalities can significantly contribute to Sustainable Development Goal (SDG) 12 of the 2030 Agenda for Sustainable Development, which is to ensure sustainable consumption and production patterns. Sustainable public procurement (SPP) practices are, however, the exception rather than the rule. While environmental criteria are increasingly considered, social standards have thus far been considered far less in public tenders. Thus, we analysed what could be done to support the implementation of Socially Responsible Public Procurement (SRPP) practices in German municipalities.
Our empirical evidence shows that there is no gold standard for implementing SRPP in municipal contexts. Figure 1 presents a map with different entry points from which practitioners and policy-makers may embark on fitting pathways. We recommend measures in the following three dimensions.
Regulatory dimension
Regulations and their “translation” for administrative bodies should be ambitious and clear. The regulatory framework on the municipal level should clearly specify how SPP is introduced and implemented, especially by defining concrete SPP goals and translating goals and policies for civil servants.
Institutional dimension
The basis for effective SPP measures is a strategic procurement organisation. Municipal stakeholders may take action in three areas to make procurement organisation more strategic. First, decision-makers can attach a higher value to procurement as an instrument to realise the strategic goals of the municipality. Second, a huge variety of procurement instruments is applicable to support this value shift. Third, due to the decentralised procurement structures in municipalities, coordination and communication between departments and persons should be streamlined, or municipal procurement should become more centralised.
Individual dimension
Information and capacity building should be offered to all stakeholders. In order to adjust regulatory and institutional conditions for effective SRPP implementation, support from administration and political decision-makers on all levels is a prerequisite. Providing customised information and offering capacity building can raise the level of support. In this regard, SRPP is most likely to be achieved when specific staff is assigned responsibility for its implementation.
Based on insights from German municipalities, this paper outlines further success factors and underlying triggers to utilise public procurement in the transformation towards sustainability.

Public procurement expenditures of European Union (EU) member states are enormous, accounting for approximately 14 per cent of value creation in the EU. In many European countries, municipalities are responsible for a large share of these expenditures, as is the case in Germany. By integrating sustainability criteria in tenders for goods, works and services, municipalities can significantly contribute to Sustainable Development Goal (SDG) 12 of the 2030 Agenda for Sustainable Development, which is to ensure sustainable consumption and production patterns. Sustainable public procurement (SPP) practices are, however, the exception rather than the rule. While environmental criteria are increasingly considered, social standards have thus far been considered far less in public tenders. Thus, we analysed what could be done to support the implementation of Socially Responsible Public Procurement (SRPP) practices in German municipalities.
Our empirical evidence shows that there is no gold standard for implementing SRPP in municipal contexts. Figure 1 presents a map with different entry points from which practitioners and policy-makers may embark on fitting pathways. We recommend measures in the following three dimensions.
Regulatory dimension
Regulations and their “translation” for administrative bodies should be ambitious and clear. The regulatory framework on the municipal level should clearly specify how SPP is introduced and implemented, especially by defining concrete SPP goals and translating goals and policies for civil servants.
Institutional dimension
The basis for effective SPP measures is a strategic procurement organisation. Municipal stakeholders may take action in three areas to make procurement organisation more strategic. First, decision-makers can attach a higher value to procurement as an instrument to realise the strategic goals of the municipality. Second, a huge variety of procurement instruments is applicable to support this value shift. Third, due to the decentralised procurement structures in municipalities, coordination and communication between departments and persons should be streamlined, or municipal procurement should become more centralised.
Individual dimension
Information and capacity building should be offered to all stakeholders. In order to adjust regulatory and institutional conditions for effective SRPP implementation, support from administration and political decision-makers on all levels is a prerequisite. Providing customised information and offering capacity building can raise the level of support. In this regard, SRPP is most likely to be achieved when specific staff is assigned responsibility for its implementation.
Based on insights from German municipalities, this paper outlines further success factors and underlying triggers to utilise public procurement in the transformation towards sustainability.

Public procurement expenditures of European Union (EU) member states are enormous, accounting for approximately 14 per cent of value creation in the EU. In many European countries, municipalities are responsible for a large share of these expenditures, as is the case in Germany. By integrating sustainability criteria in tenders for goods, works and services, municipalities can significantly contribute to Sustainable Development Goal (SDG) 12 of the 2030 Agenda for Sustainable Development, which is to ensure sustainable consumption and production patterns. Sustainable public procurement (SPP) practices are, however, the exception rather than the rule. While environmental criteria are increasingly considered, social standards have thus far been considered far less in public tenders. Thus, we analysed what could be done to support the implementation of Socially Responsible Public Procurement (SRPP) practices in German municipalities.
Our empirical evidence shows that there is no gold standard for implementing SRPP in municipal contexts. Figure 1 presents a map with different entry points from which practitioners and policy-makers may embark on fitting pathways. We recommend measures in the following three dimensions.
Regulatory dimension
Regulations and their “translation” for administrative bodies should be ambitious and clear. The regulatory framework on the municipal level should clearly specify how SPP is introduced and implemented, especially by defining concrete SPP goals and translating goals and policies for civil servants.
Institutional dimension
The basis for effective SPP measures is a strategic procurement organisation. Municipal stakeholders may take action in three areas to make procurement organisation more strategic. First, decision-makers can attach a higher value to procurement as an instrument to realise the strategic goals of the municipality. Second, a huge variety of procurement instruments is applicable to support this value shift. Third, due to the decentralised procurement structures in municipalities, coordination and communication between departments and persons should be streamlined, or municipal procurement should become more centralised.
Individual dimension
Information and capacity building should be offered to all stakeholders. In order to adjust regulatory and institutional conditions for effective SRPP implementation, support from administration and political decision-makers on all levels is a prerequisite. Providing customised information and offering capacity building can raise the level of support. In this regard, SRPP is most likely to be achieved when specific staff is assigned responsibility for its implementation.
Based on insights from German municipalities, this paper outlines further success factors and underlying triggers to utilise public procurement in the transformation towards sustainability.

Von den fast 500 Milliarden Euro, die in Deutschland jährlich für die öffentliche Beschaffung ausgegeben werden, entfallen mehr als 50 Prozent auf Kommunen. Neben dem Preis können bei der Auftragsvergabe auch soziale Kriterien zum Tragen kommen (Socially Responsible Public Procurement, SRPP). Somit birgt die öffentliche Beschaffung ein großes Potenzial, zu nachhaltigeren Konsum- und Produktionsmustern im Sinne von Ziel 12 der Agenda 2030 beizutragen. Bislang nutzen deutsche Kommunen diesen Hebel aber nur zurückhaltend. Was ist zu tun, um dies zu ändern? Es gibt nicht den einen Goldstandard für die Umsetzung von SRPP in deutschen Kommunen. Abbildung 1 zeigt einen Baukasten unterschiedlicher Maßnahmen, die je nach kommunalem Kontext und differenziert nach Einführungs- und Konsolidierungsphase genutzt werden können und sich über drei Dimensionen erstrecken – eine regulatorische, eine institutionelle und eine individuelle. Obwohl lokale Maßnahmen somit unterschiedlich aussehen können, ergeben sich folgende allgemeine Empfehlungen für Politik und Praxis:
1.    In Bezug auf die regulatorische Dimension sollten Gesetze und Vorschriften zu SRPP auf allen politischen Ebenen klar und ambitioniert gefasst sein und somit Orientierung für die praktische Umsetzung bieten. Dazu müssen Vorschriften – auch Ratsbeschlüsse – detailliert und klar für die Beschaffungspraxis „übersetzt“ werden (z.B. in Formblättern, Dienstanweisungen oder elektronischen Einkaufskatalogen).
2.    In Bezug auf die institutionelle Dimension können drei Maßnahmen dazu beitragen, kommunale Beschaffungsorganisation sozialverträglicher zu gestalten. Erstens müssen Entscheidungsträger*innen die Beschaffung als strategische Stellschraube anerkennen, mit deren Hilfe kommunale Interessen und Ziele verfolgt werden können. Zweitens sollten strategische Beschaffungsinstrumente intensiver genutzt werden (z.B. durch Bieterdialoge oder elektronische Einkaufskataloge). Drittens sollten Defizite in den Arbeits- und Kommunikationsstrukturen identifiziert und angegangen werden. Die meist dezentrale Beschaffung in deutschen Kommunen erschwert eine strategisch abgestimmte Beschaffungsplanung und -erfassung deutlich. Hilfreich ist daher die Einrichtung von Stellen, die speziell für SRPP bzw. nachhaltige Beschaffung zuständig sind.
3.    In Bezug auf die individuelle Dimension ist persönliches Engagement aktuell der wichtigste Erfolgsfaktor für kommunale SRPP-Maßnahmen. Wichtigster Auslöser hierfür ist die persönliche Überzeugung engagierter Personen. Dieser Erfolgsfaktor ist somit von außen nur schwer zu beeinflussen. Der Fokus sollte daher auf den anderen Auslösern für persönliches Engagement liegen: Austausch, Information und Weiterbildung.
Damit sozialverantwortliche öffentliche Beschaffung mittelfristig der Standard wird, müssen insbesondere Maßnahmen in den regulatorischen und institutionellen Dimensionen ergriffen werden. Engagierte Personen sind wichtig, ihr Auftreten aber kaum steuerbar.

Von den fast 500 Milliarden Euro, die in Deutschland jährlich für die öffentliche Beschaffung ausgegeben werden, entfallen mehr als 50 Prozent auf Kommunen. Neben dem Preis können bei der Auftragsvergabe auch soziale Kriterien zum Tragen kommen (Socially Responsible Public Procurement, SRPP). Somit birgt die öffentliche Beschaffung ein großes Potenzial, zu nachhaltigeren Konsum- und Produktionsmustern im Sinne von Ziel 12 der Agenda 2030 beizutragen. Bislang nutzen deutsche Kommunen diesen Hebel aber nur zurückhaltend. Was ist zu tun, um dies zu ändern? Es gibt nicht den einen Goldstandard für die Umsetzung von SRPP in deutschen Kommunen. Abbildung 1 zeigt einen Baukasten unterschiedlicher Maßnahmen, die je nach kommunalem Kontext und differenziert nach Einführungs- und Konsolidierungsphase genutzt werden können und sich über drei Dimensionen erstrecken – eine regulatorische, eine institutionelle und eine individuelle. Obwohl lokale Maßnahmen somit unterschiedlich aussehen können, ergeben sich folgende allgemeine Empfehlungen für Politik und Praxis:
1.    In Bezug auf die regulatorische Dimension sollten Gesetze und Vorschriften zu SRPP auf allen politischen Ebenen klar und ambitioniert gefasst sein und somit Orientierung für die praktische Umsetzung bieten. Dazu müssen Vorschriften – auch Ratsbeschlüsse – detailliert und klar für die Beschaffungspraxis „übersetzt“ werden (z.B. in Formblättern, Dienstanweisungen oder elektronischen Einkaufskatalogen).
2.    In Bezug auf die institutionelle Dimension können drei Maßnahmen dazu beitragen, kommunale Beschaffungsorganisation sozialverträglicher zu gestalten. Erstens müssen Entscheidungsträger*innen die Beschaffung als strategische Stellschraube anerkennen, mit deren Hilfe kommunale Interessen und Ziele verfolgt werden können. Zweitens sollten strategische Beschaffungsinstrumente intensiver genutzt werden (z.B. durch Bieterdialoge oder elektronische Einkaufskataloge). Drittens sollten Defizite in den Arbeits- und Kommunikationsstrukturen identifiziert und angegangen werden. Die meist dezentrale Beschaffung in deutschen Kommunen erschwert eine strategisch abgestimmte Beschaffungsplanung und -erfassung deutlich. Hilfreich ist daher die Einrichtung von Stellen, die speziell für SRPP bzw. nachhaltige Beschaffung zuständig sind.
3.    In Bezug auf die individuelle Dimension ist persönliches Engagement aktuell der wichtigste Erfolgsfaktor für kommunale SRPP-Maßnahmen. Wichtigster Auslöser hierfür ist die persönliche Überzeugung engagierter Personen. Dieser Erfolgsfaktor ist somit von außen nur schwer zu beeinflussen. Der Fokus sollte daher auf den anderen Auslösern für persönliches Engagement liegen: Austausch, Information und Weiterbildung.
Damit sozialverantwortliche öffentliche Beschaffung mittelfristig der Standard wird, müssen insbesondere Maßnahmen in den regulatorischen und institutionellen Dimensionen ergriffen werden. Engagierte Personen sind wichtig, ihr Auftreten aber kaum steuerbar.

Von den fast 500 Milliarden Euro, die in Deutschland jährlich für die öffentliche Beschaffung ausgegeben werden, entfallen mehr als 50 Prozent auf Kommunen. Neben dem Preis können bei der Auftragsvergabe auch soziale Kriterien zum Tragen kommen (Socially Responsible Public Procurement, SRPP). Somit birgt die öffentliche Beschaffung ein großes Potenzial, zu nachhaltigeren Konsum- und Produktionsmustern im Sinne von Ziel 12 der Agenda 2030 beizutragen. Bislang nutzen deutsche Kommunen diesen Hebel aber nur zurückhaltend. Was ist zu tun, um dies zu ändern? Es gibt nicht den einen Goldstandard für die Umsetzung von SRPP in deutschen Kommunen. Abbildung 1 zeigt einen Baukasten unterschiedlicher Maßnahmen, die je nach kommunalem Kontext und differenziert nach Einführungs- und Konsolidierungsphase genutzt werden können und sich über drei Dimensionen erstrecken – eine regulatorische, eine institutionelle und eine individuelle. Obwohl lokale Maßnahmen somit unterschiedlich aussehen können, ergeben sich folgende allgemeine Empfehlungen für Politik und Praxis:
1.    In Bezug auf die regulatorische Dimension sollten Gesetze und Vorschriften zu SRPP auf allen politischen Ebenen klar und ambitioniert gefasst sein und somit Orientierung für die praktische Umsetzung bieten. Dazu müssen Vorschriften – auch Ratsbeschlüsse – detailliert und klar für die Beschaffungspraxis „übersetzt“ werden (z.B. in Formblättern, Dienstanweisungen oder elektronischen Einkaufskatalogen).
2.    In Bezug auf die institutionelle Dimension können drei Maßnahmen dazu beitragen, kommunale Beschaffungsorganisation sozialverträglicher zu gestalten. Erstens müssen Entscheidungsträger*innen die Beschaffung als strategische Stellschraube anerkennen, mit deren Hilfe kommunale Interessen und Ziele verfolgt werden können. Zweitens sollten strategische Beschaffungsinstrumente intensiver genutzt werden (z.B. durch Bieterdialoge oder elektronische Einkaufskataloge). Drittens sollten Defizite in den Arbeits- und Kommunikationsstrukturen identifiziert und angegangen werden. Die meist dezentrale Beschaffung in deutschen Kommunen erschwert eine strategisch abgestimmte Beschaffungsplanung und -erfassung deutlich. Hilfreich ist daher die Einrichtung von Stellen, die speziell für SRPP bzw. nachhaltige Beschaffung zuständig sind.
3.    In Bezug auf die individuelle Dimension ist persönliches Engagement aktuell der wichtigste Erfolgsfaktor für kommunale SRPP-Maßnahmen. Wichtigster Auslöser hierfür ist die persönliche Überzeugung engagierter Personen. Dieser Erfolgsfaktor ist somit von außen nur schwer zu beeinflussen. Der Fokus sollte daher auf den anderen Auslösern für persönliches Engagement liegen: Austausch, Information und Weiterbildung.
Damit sozialverantwortliche öffentliche Beschaffung mittelfristig der Standard wird, müssen insbesondere Maßnahmen in den regulatorischen und institutionellen Dimensionen ergriffen werden. Engagierte Personen sind wichtig, ihr Auftreten aber kaum steuerbar.

This report, which focuses on innovation, is the third by The World in 2050 (TWI2050) initiative that was established by the International Institute for Applied Systems Analysis (IIASA) and other partners to provide scientific foundations for the UN’s 2030 Agenda for Sustainable Development. This report is based on the voluntary and collaborative effort of more than 60 authors and contributors from about 20 institutions globally, who met virtually to develop science-based strategies and pathways toward achieving the Sustainable Development Goals (SDGs). Presentations of the TWI2050 approach and work have been made at many international conferences such as the United Nations Science, Technology and Innovation Forums and the United Nations High-level Political Forums.

Innovations for Sustainability: Pathways to an efficient and sufficient post-pandemic future assesses all the positive potential benefits innovation brings to sustainable development for all, while also highlighting the potential negative impacts and challenges going forward. The report outlines strategies to harness innovation for sustainability by focusing on efficiency and sufficiency in providing services to people, with a particular focus on consumption and production. It concludes with the related governance challenges and policy implications.

This report, which focuses on innovation, is the third by The World in 2050 (TWI2050) initiative that was established by the International Institute for Applied Systems Analysis (IIASA) and other partners to provide scientific foundations for the UN’s 2030 Agenda for Sustainable Development. This report is based on the voluntary and collaborative effort of more than 60 authors and contributors from about 20 institutions globally, who met virtually to develop science-based strategies and pathways toward achieving the Sustainable Development Goals (SDGs). Presentations of the TWI2050 approach and work have been made at many international conferences such as the United Nations Science, Technology and Innovation Forums and the United Nations High-level Political Forums.

Innovations for Sustainability: Pathways to an efficient and sufficient post-pandemic future assesses all the positive potential benefits innovation brings to sustainable development for all, while also highlighting the potential negative impacts and challenges going forward. The report outlines strategies to harness innovation for sustainability by focusing on efficiency and sufficiency in providing services to people, with a particular focus on consumption and production. It concludes with the related governance challenges and policy implications.

This report, which focuses on innovation, is the third by The World in 2050 (TWI2050) initiative that was established by the International Institute for Applied Systems Analysis (IIASA) and other partners to provide scientific foundations for the UN’s 2030 Agenda for Sustainable Development. This report is based on the voluntary and collaborative effort of more than 60 authors and contributors from about 20 institutions globally, who met virtually to develop science-based strategies and pathways toward achieving the Sustainable Development Goals (SDGs). Presentations of the TWI2050 approach and work have been made at many international conferences such as the United Nations Science, Technology and Innovation Forums and the United Nations High-level Political Forums.

Innovations for Sustainability: Pathways to an efficient and sufficient post-pandemic future assesses all the positive potential benefits innovation brings to sustainable development for all, while also highlighting the potential negative impacts and challenges going forward. The report outlines strategies to harness innovation for sustainability by focusing on efficiency and sufficiency in providing services to people, with a particular focus on consumption and production. It concludes with the related governance challenges and policy implications.

We run recentered influence function (RIF) regressions, using Firpo et al. (2007) distributional approach to identify each control variable’s contribution on the decomposition of wage changes. Using the Egyptian Labour Market Surveys 1998–2012 for waged men we find that wage changes between 1998 and 2012 mainly resulted in increased inequality. The richer percentiles have persistently enjoyed disproportionately larger positive changes in real hourly wages. Whilst increasing in all three wage gaps, inequality increased the most between the top and bottom deciles (90–10 gap), i.e. between the lowest and highest wage earners. This increase in inequality is primarily driven by the unexplained wage structure effect. The distinct labour market segments are foremost responsible for the increased inequality trend. Private sector informality is the largest contributor to increased inequality. The sector does not adhere to a minimum wage, and being unregulated it has responded dramatically to the severe competitive pressures caused by the departing middle classes of the public sector. It suppressed mid and low-end wages resulting in sharp wage gaps at the tails. Public sector wage setting dynamics and the direction of labour movements since liberalization cause the sector to contribute more to wage inequality than does its formal private counterpart.

We run recentered influence function (RIF) regressions, using Firpo et al. (2007) distributional approach to identify each control variable’s contribution on the decomposition of wage changes. Using the Egyptian Labour Market Surveys 1998–2012 for waged men we find that wage changes between 1998 and 2012 mainly resulted in increased inequality. The richer percentiles have persistently enjoyed disproportionately larger positive changes in real hourly wages. Whilst increasing in all three wage gaps, inequality increased the most between the top and bottom deciles (90–10 gap), i.e. between the lowest and highest wage earners. This increase in inequality is primarily driven by the unexplained wage structure effect. The distinct labour market segments are foremost responsible for the increased inequality trend. Private sector informality is the largest contributor to increased inequality. The sector does not adhere to a minimum wage, and being unregulated it has responded dramatically to the severe competitive pressures caused by the departing middle classes of the public sector. It suppressed mid and low-end wages resulting in sharp wage gaps at the tails. Public sector wage setting dynamics and the direction of labour movements since liberalization cause the sector to contribute more to wage inequality than does its formal private counterpart.

We run recentered influence function (RIF) regressions, using Firpo et al. (2007) distributional approach to identify each control variable’s contribution on the decomposition of wage changes. Using the Egyptian Labour Market Surveys 1998–2012 for waged men we find that wage changes between 1998 and 2012 mainly resulted in increased inequality. The richer percentiles have persistently enjoyed disproportionately larger positive changes in real hourly wages. Whilst increasing in all three wage gaps, inequality increased the most between the top and bottom deciles (90–10 gap), i.e. between the lowest and highest wage earners. This increase in inequality is primarily driven by the unexplained wage structure effect. The distinct labour market segments are foremost responsible for the increased inequality trend. Private sector informality is the largest contributor to increased inequality. The sector does not adhere to a minimum wage, and being unregulated it has responded dramatically to the severe competitive pressures caused by the departing middle classes of the public sector. It suppressed mid and low-end wages resulting in sharp wage gaps at the tails. Public sector wage setting dynamics and the direction of labour movements since liberalization cause the sector to contribute more to wage inequality than does its formal private counterpart.

The structural transformation of countries moves them towards more sophisticated, higher-value products. Network analysis, using the Product Space Methodology (PSM), guides countries towards leading export sectors. The identification process rests on two pillars: (1) available opportunities, that is, products in the product space that the country does not yet export which are more sophisticated than its current exports; and (2) the stock of a country’s accumulated productive knowledge and the technical capabilities that, through spillovers, enable it to produce slightly more sophisticated products. The PSM points to a tradeoff between capabilities and complexity. It identifies very basic future products that match the two countries’ equally basic capabilities. Top products are simple animal products, cream and yogurt, modestly sophisticated plastics, metals and minerals such as salt and sulphur for Egypt; and slightly more sophisticated products such as containers and bobbins (plastics) and broom handles and wooden products for Tunisia, which is the more advanced of the two countries. A more interventionist approach steers the economy towards maximum sophistication, thus identifying highly complex manufactured metals, machinery, equipment, electronics and chemicals. Despite pushing for economic growth and diversification, these sectors push urban job creation and require high-skill workers, with the implication that low-skilled labour may be pushed into unemployment or into low-value informal jobs. A middle ground is a forward-looking strategy that takes sectors’ shares in world trade into account.

The structural transformation of countries moves them towards more sophisticated, higher-value products. Network analysis, using the Product Space Methodology (PSM), guides countries towards leading export sectors. The identification process rests on two pillars: (1) available opportunities, that is, products in the product space that the country does not yet export which are more sophisticated than its current exports; and (2) the stock of a country’s accumulated productive knowledge and the technical capabilities that, through spillovers, enable it to produce slightly more sophisticated products. The PSM points to a tradeoff between capabilities and complexity. It identifies very basic future products that match the two countries’ equally basic capabilities. Top products are simple animal products, cream and yogurt, modestly sophisticated plastics, metals and minerals such as salt and sulphur for Egypt; and slightly more sophisticated products such as containers and bobbins (plastics) and broom handles and wooden products for Tunisia, which is the more advanced of the two countries. A more interventionist approach steers the economy towards maximum sophistication, thus identifying highly complex manufactured metals, machinery, equipment, electronics and chemicals. Despite pushing for economic growth and diversification, these sectors push urban job creation and require high-skill workers, with the implication that low-skilled labour may be pushed into unemployment or into low-value informal jobs. A middle ground is a forward-looking strategy that takes sectors’ shares in world trade into account.

The structural transformation of countries moves them towards more sophisticated, higher-value products. Network analysis, using the Product Space Methodology (PSM), guides countries towards leading export sectors. The identification process rests on two pillars: (1) available opportunities, that is, products in the product space that the country does not yet export which are more sophisticated than its current exports; and (2) the stock of a country’s accumulated productive knowledge and the technical capabilities that, through spillovers, enable it to produce slightly more sophisticated products. The PSM points to a tradeoff between capabilities and complexity. It identifies very basic future products that match the two countries’ equally basic capabilities. Top products are simple animal products, cream and yogurt, modestly sophisticated plastics, metals and minerals such as salt and sulphur for Egypt; and slightly more sophisticated products such as containers and bobbins (plastics) and broom handles and wooden products for Tunisia, which is the more advanced of the two countries. A more interventionist approach steers the economy towards maximum sophistication, thus identifying highly complex manufactured metals, machinery, equipment, electronics and chemicals. Despite pushing for economic growth and diversification, these sectors push urban job creation and require high-skill workers, with the implication that low-skilled labour may be pushed into unemployment or into low-value informal jobs. A middle ground is a forward-looking strategy that takes sectors’ shares in world trade into account.