Inclusive and sustainable industrialization, together with innovation and infrastructure, can unleash dynamic and competitive economic forces that generate employment and income. They play a key role in introducing and promoting new technologies, facilitating international trade and enabling the efficient use of resources.
However, the world still has a long way to go to fully tap this potential. Least developed countries, in particular, need to accelerate the development of their manufacturing sector if they are to meet the 2030 target, and scale up investment in scientific research and innovation.
Global manufacturing growth has been steadily declining, even before the outbreak of the COVID-19 pandemic. The pandemic is hitting manufacturing industries hard and causing disruptions in global value chains and the supply of products.
Innovation and technological progress are key to finding lasting solutions to both economic and environmental challenges, such as increased resource and energy-efficiency. Globally, investment in research and development (R&D) as a proportion of GDP increased from 1.5 per cent in 2000 to 1.7 per cent in 2015 and remained almost unchanged in 2017, but was only less than 1 per cent in developing regions.
In terms of communications infrastructure, more than half of the world’s population is now online and almost the entire world population lives in an area covered by a mobile network. It is estimated that in 2019, 96.5 per cent were covered by at least a 2G network.
The coronavirus pandemic has revealed the urgent need for resilient infrastructure. The Asian Development Bank notes that critical infrastructure in the region remains far from adequate in many countries, despite the rapid economic growth and development the region has experienced over the past decade. The Economic and Social Survey of Asia and the Pacific highlights that making infrastructure resilient to disasters and climate change will require an additional investment of $434 billion per year. This sum may need to be even greater in some subregions, such as the Pacific small island developing states.
- Basic infrastructure like roads, information and communication technologies, sanitation, electrical power and water remains scarce in many developing countries
- 16% of the global population does not have access to mobile broadband networks.
- For many African countries, particularly the lower-income countries, the existent constraints regarding infrastructure affect firm productivity by around 40 per cent.
- The global share of manufacturing value added in GDP increased from 15.2% in 2005 to 16.3% in 2017, driven by the fast growth of manufacturing in Asia.
- Industrialization’s job multiplication effect has a positive impact on society. Every job in manufacturing creates 2.2 jobs in other sectors.
- Small and medium-sized enterprises that engage in industrial processing and manufacturing are the most critical for the early stages of industrialization and are typically the largest job creators. They make up over 90 per cent of business worldwide and account for between 50-60 per cent of employment.
- Least developed countries have immense potential for industrialization in food and beverages (agro-industry), and textiles and garments, with good prospects for sustained employment generation and higher productivity
- Middle-income countries can benefit from entering the basic and fabricated metals industries, which offer a range of products facing rapidly growing international demand
- In developing countries, barely 30 per cent of agricultural production undergoes industrial processing. In high-income countries, 98 per cent is processed. This suggests that there are great opportunities for developing countries in agribusiness.
9.1 Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all
9.2 Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries
9.3 Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets
9.4 By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities
9.5 Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending
9.A Facilitate sustainable and resilient infrastructure development in developing countries through enhanced financial, technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing States 18
9.B Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, inter alia, industrial diversification and value addition to commodities
9.C Significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries by 2020
- How industrial development matters to the well-being of the population
- Industrial Development Report of UNIDO