Horizontal Linkages (Beyond Extractives)
At a Glance
- “Horizontal” (or “lateral”) linkages refer to the development of new industries based on capabilities and skills from extractive industry supply chains. As such, they provide a unique opportunity to diversify the economy away from the extractive sector.
- Horizontal linkages can be based on transferable skills that are not sector specific or from the adaptation of capabilities already employed in the extractive sector.
- Often referred to as “spillover benefits,” horizontal linkages are more likely to occur when “backward” linkages (involving the local procurement of goods and services) or “forward” linkages (involving the processing of extractive outputs) have already been created.
Case Studies
- Australia Horizontal Linkages: Positive Spillovers Through Horizontal Linkages (Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development)
- Chile Horizontal Linkages: Using Taxation to Foster Horizontal Linkages (Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development)
- Finland as a Knowledge Economy: Elements of Success and Lessons Learned (Carl J. Dahlman, Jorma Routti, Pekka Yla-Anttila)
- Guinea Horizontal Linkages: Challenges of a Linkages-Driven Approach to Mining Infrastructure Environment (Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development)
- Mozambique Horizontal Linkages: Constraints of Building Horizontal Linkages in a Low-Capacity Environment (Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development)
- Norway Horizontal Linkages: Local Context as the Main Driver for Horizontal Linkages (Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development)
- South Africa Horizontal Linkages - Building Expertise by Overcoming Country-Specific Constraints (Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development)
- South African Mining Equipment and Related Services: Growth Constraints and Policy (David Kaplan)
- Tanzania Horizontal Linkages: The Challenges of Multistakeholder Infrastructure Projects (Intergovernmental Forum on Mining Minerals Metals and Sustainable Development)
Key Resources
- Linkages to the Resource Sector: The Role of Companies, Government, and International Development Cooperation (Columbia Center for Sustainable Investment, Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ))
- One Thing Leads to Another: Promoting Industrialisation by Making the Most of the Commodity Boom in Sub-Saharan Africa (David Kaplan, Raphael Kaplinsky, Mike Morris)
- Commodities for Industrial Development: Making Linkages Work (Raphael Kaplinsky)
- IGF Guidance for Governments: Local Content Policies (Aaron Cosbey, Isabelle Ramdoo)
- Extractive Industries: Optimizing Value Retention in Host Countries (United Nations Conference on Trade and Development)
Topic Briefing
“Horizontal” (or “lateral”) linkages relate to the development of new industries using the capabilities and skills of the extractive industry supply chain. For example, metalwork skills required for the manufacture and assembly of oil rig control lines can be used to develop other construction and manufacturing industries. Similarly, IT skills developed for the oil sector can be used in other sectors.[1]