Abstract
This paper systematically reviews the theoretical perspectives underpinning economic transformation and empirically assesses its multi-faceted impact on national and global economies.The theoretical prospective draws upon key schools of thought, including McMillan et al.’s Process of Productive-Driven Structural Change, Joseph Schumpeter’s Innovation, Creative Destruction and Economic Development, Alfred Marshall’s Gradual Evolution and Industrial Change, Dani Rodrik’s Structual Shifts, Policy Pragmatism and Binding Constraints and Justin Yifu Lin’s New Structural Economics and comparative Advantage. Using content analysis, the study’s impact assessment focuses on core components of successful transformation, including: structural diversification, export competitiveness, productivity gains (both between and within sectors), technological upgrading, and human well-being. Analysis reveals that while economic growth is a prerequisite, true transformation demands active public policies to manage the transition, overcome market failures, and ensure the resulting growth is inclusive and sustainable. The paper synthesizes evidence demonstrating that successful transformation leads to higher and more resilient GDP per capita growth, better integration into global value chains, and improved socio-economic indicators, while highlighting the complex political and institutional challenges that often constrain its realization in developing and emerging economies.