Master's Thesis from the year 2017 in the subject Business economics - Supply, Production, Logistics, , language: English, abstract: Ethiopia's industrial activity has been characterized by meager growth for the last epochs. But recently the Ethiopian government endorsed Growth and Transformation Plan (GTP) which gives prime attention to selected industries. This study examines the likely effect of productivity expansion of labor intensive industrial activities on the macro economy, government priority industries, factor and household income and welfare of households. The sectors were selected from the Ethiopian 2009/10 SAM based on their production characteristics. The selected labor intensive sectors include dairy, grain milling, milling service, sugar refining, other food process, beverage, textile, leather product and wood products. In order to investigate the impact of a 10% increase in the technical coefficients of these labor intensive industrial activities, the study used the static stage computable general equilibrium (CGE) model. The recently updated 2009/10 Ethiopian SAM was used to calibrate important parameters of the CGE models.The 2009/10 Ethiopian SAM revealed that 45.22% and 52.13% of rural and urban households generate their income from labor. The production expansion via an increase in their technical coefficient of the sectors derived significant change on macro variables such as real GDP, government consumption demand, investment demand, household...