In developing countries and economies in transition, industrial small and medium enterprises (SMEs) often lack managerial capacities and have insufficient knowledge of business processes as well as of operational and production cycles. Furthermore, their performance is often hindered by poor technologies utilized and limited access to finance needed to expand production capacities. Individual SMEs also find it very difficult to deal with policy and regulatory challenges that impact on their sector or on the business sector in general. This results in creating obstacles and barriers to SMEs to compete on domestic and international markets. Tackling these challenges in a holistic way will allow SMEs to produce innovative, cost effective, safe, reliable, and quality products in sufficient volumes. 

The Industrial Upgrading and Modernization Programme (IUMP) aims to contribute to economic growth and facilitate regional integration of developing countries and economies in transition by increasing the capacities of local industries for value added generation, economic diversification, exports and employment creation. UNIDO advocates that competitiveness and innovation are the key dynamics to take advantage of liberalization and to drive economic development and growth.

An Integrated Solution for Industry Competitiveness 

A number of internal and external factors play a critical role in the performance and competitiveness of SMEs. Factors related to business environment, industrial and economic policies and support institutions are as important as internal factors influencing production and growth of SMEs. Addressing one or a set of factors in a fragmented and uncoordinated manner is unlikely to enhance SME competitiveness and trade performance. Therefore, the integrated technical assistance offered by IUMP consists of remedial actions at three levels to maximize industrial competitiveness. A holistic IUMP focuses on promoting competitiveness and diversification of manufacturing sectors along with improving regulatory frameworks and the business environment, and reinforcing institutional capacities of technical and business support infrastructure.

IUMP Experience and Impact  

UNIDO successfully implemented a number of upgrading projects at the national and regional levels in a number of countries in North Africa, the Middle East, and West, Central and East African sub-regions. Currently, IUMP is expanding its regional coverage to Asia, Eastern Europe, the Caucasus and Central Asian countries. 

UNIDO’s industrial upgrading programmes have had immediate impacts on the acceleration of growth of industrial sectors, thereby contributing to overall economic growth and employment creation. Industrial upgrading is often at the core of national and regional action plans that UNIDO Member States adopt for economic growth and industrialization.  

For more on the UNIDO Industrial Upgrading and Modernization Approach and project experience, please consult the IUMP brochure.