The Research and Industrial Policy Advice Division (RPA) conducts applied economic research on themes related to UNIDO’s mandate of Inclusive and Sustainable Industrial Development (ISID) at the global, regional, country and sector level, and supports Member States in formulating, implementing, monitoring and evaluating industrial policy and interventions. The Division’s activities include the publication of policy-oriented knowledge products such as the Organization’s flagship Industrial Development Report (IDR), industrial country diagnostics to initiate the Programme for Country Partnership (PCP), the ISID working paper series, research publications and articles. Building on solid empirical and evidence-based analysis, RPA provides industrial policy advice and support services to Member States to accelerate their industrial development and economic growth with the aim of achieving ISID.
CONAKRY, 17 January 2022 – Guinea, a country with an economy dependent on the export of bauxite, gold and diamonds, should urgently diversify. This was one of the main findings of a recent study on the status of industrial development carried out by a team of experts from the United Nations Industrial Development Organization (UNIDO). The study was conducted in collaboration and consultation with Guinea’s Ministry of Commerce, Industry and Small and Medium Enterprises, as well as representatives of the private sector.
The findings of the study were discussed on 21 December, the second day of the Salon de l'industrie, held under the auspices of the Ministry of Commerce, Industry and Small and Medium Enterprises and in collaboration with UNIDO. The diagnostics study has been funded by the Relance de la filière ananas (REFILA), a project implemented by UNIDO and financed by the European Union in the framework of the West Africa Competitiveness Programme (WACOMP), which, in Guinea, aims to improve the performance of the country’s pineapple sector, and also supports the formulation of industrial policies.
During the workshop, UNIDO Research and Industrial Policy Officer, Nicola Cantore, presented the main findings of the industry diagnostic, examining the situation- of specific industries and individual manufacturing firms on the macro level. Cantore stressed that, as Guinea’s economy is heavily dependent on the production and export of minerals, diversification would reduce the country´s vulnerability to market shocks and would widen the array of business opportunities for value added creation in the country. Industrialization is, he said, pivotal. The country’s medium–long term structural change process could be triggered by building on existing capabilities and, in particular, by transforming domestic raw materials, thereby creating longer value chains connecting the primary sector to other, more modern, productive activities.
In a second presentation, UNIDO Industrial Policy Officer, Frank Hartwich, explained the role that UNIDO can play in supporting the government-lead industrial policymaking process to transform the country through inclusive and sustainable industrial development. Hartwich said UNIDO is ready to support strategy formulation and policy design and implementation in Guinea, focusing in particular on strengthening local policymaking capacities based on evidence.
Finally, the enterprise-upgrading expert, Taoufik Chaabane, highlighted the various activities of the REFILA project to promote firm upgrading in Guinea and related them to industrial policies in place and to be further developed.
Ansoumane Berete, UNIDO Representative in Guinea, summed up that industrialization is a priority for the country and that the technical expertise of UNIDO can be crucial to support Guinea in the implementation of industrial policy. At the end of the workshop, there was a clear commitment from Guinean stakeholders and UNIDO representatives to continue the dialogue to prepare the next action for industrial policy.
VIENNA, 1 December 2021 - The United Nations Industrial Development Organization (UNIDO) has launched its 2022 Industrial Development Report (IDR), The Future of Industrialization in a Post-pandemic World, at a plenary event of the nineteenth session of the UNIDO General Conference. The main findings of the report were presented and discussed with a panel of high-level policymakers and prominent experts in the field of industrial development.
The COVID-19 pandemic has had, and continues to have, devastating effects on economies and societies, threatening to undo years of progress towards achieving the 2030 Agenda for Sustainable Development. Opening the event, UNIDO’s Director General, LI Yong, asserted that we are living in a time of exceptional challenges and called for an active engagement in fostering an inclusive and sustainable recovery in the post-pandemic. “The imperative of accelerating efforts to achieve the 2030 Agenda for Sustainable Development has never been more urgent,” he said.
The IDR 2022 documents the socio-economic impact of the COVID-19 pandemic on different regions and countries of the world and examines the role played by the industrial sector during the crisis. The report shows that the COVID-19 pandemic hit hard all corners of the globe, but affected some countries, industries and workers more than others. It presents fresh quantitative and qualitative evidence and identifies key factors of resilience, as well as vulnerability. Understanding these factors is crucial in the design of industrial recovery strategies and policies.
One key finding is that the industrial sector plays a key role in fostering socioeconomic resilience. By guaranteeing access to essential goods, such as food and medicines and vaccines, manufacturing keeps economies afloat and drives them forward. As stressed by UNIDO’s Deputy Director General, Hiroshi Kuniyoshi, in his presentation of the main findings and messages of the IDR 2022, “Countries with stronger manufacturing systems were able to withstand the crisis better.”
These findings strongly reaffirm the importance of achieving SDG 9 to reach the goals of the 2030 Agenda. The role of the industrial sector during the crisis was also remarked on by Victoria Hernández Mora, Costa Rica's Minister of Economy, Industry and Commerce. “In Costa Rica, industry was the least affected economic sector” she said, recognizing the importance of a proactive private-public collaboration in developing containment measures to allow industries operate safely.
Another key finding of the IDR 2022 is that industrial capabilities and digitalization supported countries’ resilience during the pandemic. According to the report, digital technologies enable businesses to continue operating remotely and to maintain their consumer bases, making digitally advanced firms better able to weather the pandemic’s impact and to adjust to the new normality. Preparing for the post-pandemic future therefore requires also developing countries to further strengthen their digital capabilities.
“This new digital revolution represents a window of opportunity for countries in the global South” said Fu Xiaolan, Funding Director of the University of Oxford’s Technology and Management Centre for Development. “UNIDO can lead the acceleration of industrial digital transformation in developing countries, in collaboration with other agencies and task forces.”
Looking into the future, the IDR 2022 highlights three important megatrends expected to shape the post-pandemic landscape - digitalization, production rebalancing and industrial greening - and emphasizes that countries must take these megatrends into account when designing recovery strategies. According to the report, to build back better, recovery must be green and inclusive, pursuing a more sustainable and safer path of development. Countries need to accelerate the shift to a green industrial sector and to transform their energy systems,as indicated by Jeffrey Sachs, President of the United Nations Sustainable Development Social Solutions Network. “It is necessary to overcome the challenges to move from fossil fuels to renewable sources and zero carbon power generation,” he added, “but to do so developing countries need more access to adequate financing and technologies.”
At the same time, the recovery strategies should protect those who have been most affected by the crisis, such as small- and medium-sized enterprises, women, youth and informal workers. “We strongly support the acceleration of the digital revolution in micro, small and medium enterprises and help them overcome the digital divide”, said Costa Rica's Mora in her intervention, “and the increase of women insertion in labour market through to the possibility of remote working.”
Based on its main findings, the IDR 2022 provides policy recommendations and calls the international community to act promptly and vigorously to build a better post-COVID-19 future. Discussing the global nature of the economic crisis resulting from the COVID-19 pandemic and the need to accelerate the global production and provision of vaccines, Fu, Funding Director of the University of Oxford’s Technology and Management Centre for Development emphasized the need for renewed international commitments and collaboration mechanisms. She said, “The acceleration of the global rollout of vaccine is crucial in defeating the pandemic and build back better. International partnerships involving countries, international organizations and pharmaceutical companies can be an effective mechanism to accelerate the technology transfer for global vaccine”, adding, “We should not waste this opportunity.”
The Industrial Development Report series is an established source of reference on industrial development. Earlier editions examined the driving forces of industrial development. They also described the reasons why industrialization is a major engine of economic development and key for the achievement of the Sustainable Development Goals.
VIENNA, 15 December 2020 -The COVID-19 pandemic is putting globalization to the test. In this context, the key challenges of assessing risks to global value chains and developing strategies to increase their resilience were the focus of the fifth edition of the Forum on Globalization and Industrialization, the joint initiative of the United Nations Industrial Development Organization (UNIDO) and the Kiel Institute for the World Economy (IfW Kiel). This year’s Forum was held virtually under the title, “Globalization at the Crossroads: Risk, Resilience and Recalibration in Global Trade and Value Chains”, and brought together more than 300 participants from over 60 countries.
In his opening words,UNIDO’s Director General, LI Yong, said, “The pandemic has led to increased scrutiny of some of the established economic paradigms. Globalization, which relies on the premise of international production, trade and investment flows, and which has widened the economic opportunities of millions of people, has been called into question.”
He also highlighted the supply chain disruptions caused by the pandemic which prompt firms to make their supply chains more resilient. “Reinforcing regional operations by shortening supply chains and staying closer to the consumer is one of the possible strategies. Yet, resilience is not a call for self-sufficiency, and reinforcing regional integration is not a call for anti-globalism,” stated Li.
Professor Felbermayr, President of the Kiel Institute for the World Economy, said, “In the spring (of this year), scepticism was looming large but today we see that certain problems that we saw are solved. Personal protective equipment is no longer scarce at all.” He further highlighted the relevance of multilateralism for the development of the COVID-19 vaccine, taking the example the cross-border cooperation between Biontech and Pfizer that produced the first supplies of a COVID vaccine. But although multilateralism has proven to be efficient during the pandemic, Felbermayr still sees a danger of economies turning inwards in their search for resilience and independence.
Rania Al-Mashat, Egypt’s Minister of International Cooperation, discussed the future of global value chains in Egypt and the MENA region. Talking about potential trends towards localized supply chains, Al-Mashat raised doubts about the feasibility of moving supply chains to new regions. She further addressed the concept of green recovery as an international trend, mentioning that both governments and companies increasingly attach importance to Environmental, Social and Governance (ESG) criteria. “This also pushes, implicitly, a globalized agenda because ESG are rules and guidelines that everyone is reading about, talking about, writing about and trying to comply with.”
“Forty-four percent [of executives surveyed] said they would start to consider resilience at the cost of short-term efficiency,” said Susan Lund, from the McKinsey Global Institute. Lund gave insights into firm-level policies to increase resilience and remarked that the actions to increase resilience, such as dual sourcing, may offer development perspectives for new markets. “We will see trade flows shift more over the next three to five years than we have in the past, as companies seek to diversify their supplier base. And I think this is good news for countries that haven’t participated as heavily in global value chains in the past,” concluded Lund.
Drawing on his long experience as a researcher, Ricardo Hausmann, Professor at the Harvard University, discussed industrial policy implications of the pandemic. Since the pandemic has hit middle-income countries harder than high-income countries in terms of debt growth and GDP reduction, and as the distribution of the vaccine is expected to be later in emerging economies, Hausmann expects adverse effects on the recovery of middle-income countries. “My concern is that there is too little fiscal room in middle-income countries. […] They have been too cautious from a global optimum point of view. There has been an enormous destruction of jobs and firms. So, I think we need more international finance,” said Hausmann.
Based on recent experiences, all panellists agreed that one of the main lessons learned from the pandemic is that value chains have to become more resilient. However, resilience cannot be achieved by turning inward. Instead, companies should focus on building up diversified supply chains which can create development potential for new regions. All panellists also agreed that the road to a sustained recovery requires a strengthening of international collaboration and alignment efforts at different levels and across multiple stakeholders.
VIENNA, 16 November 2020 -The COVID-19 pandemic is posing enormous challenges to economic development, yet it may also unveil new opportunities to ‘build back better’. Renewed industrial policies can play a significant role in shaping the road to overcome the crisis and set countries back on the path of economic development.
Opening the second episode of the webinar series, “Future of Industrialization in a post-pandemic world”, LI Yong, Director General of the United Nations Industrial Development Organization (UNIDO) said, “Strengthening the industrial sector is the key to the recovery. To achieve this important goal, industrial policies must be at the centre of governments’ reactions.”
A similar view was shared by Mario Cimoli, Deputy Executive Secretary of the UN Economic Commission for Latin America and the Caribbean (ECLAC), who emphasized that the post-pandemic recovery must be transformative and countries should place a primary focus not only on economic growth, but also on the direction of growth. “We need growth, but the quality of growth is important. Equality is the pre-condition for industrial policy, growth and development,” said Cimoli.
Drawing on her experience as a policy advisor on innovation-led inclusive and sustainable growth, Mariana Mazzucato, Professor of Economics of Innovation and Public Value at the University College London (UCL) and Founding Director of the UCL Institute for Innovation and Public Purpose, discussed the role of public-private partnership in providing an effective response to the global challenges accelerated by the pandemic - from decarbonization to the digital divide, to any issue around the health system.
Using examples from developing economies, such as Viet Nam and the Indian state of Kerala, Mazzucato stressed the importance of investing in state capacity for a more inclusive, sustainable and resilient recovery. “With COVID-19, we realized we need state capacity”, she said.
She also remarked on the need to place SDGs at the centre of industrial strategy by transforming them into missions to orientate governments’ actions. “SDGs are complex goals. We need to transform governments’ activities - even everyday ones, such as industrial procurement - to be SDG-focused”, said Mazzucato. Pursuing such outcome-focused industrial strategy requires a renewed collaboration across sectors and stakeholders to redesign policy instruments together. In this regard, Mazzucato highlighted the transformational purpose of attaching goal-focused conditions to recovery packages, and how this can lead to more sustainable solutions and social outcomes.
The crucial role of governments in supporting the recovery was also highlighted by Justin Lin, Professor and Dean of the National School of Development at Peking University. Building on his New Structural Economics approach, Lin discussed how industrial policies are necessary to sustain structural change and build more resilient and competitive economies. “To develop an industrial sector, we need a facilitating State,” he said. “If the government is not playing a facilitation role, a spontaneous structural transformation cannot occur.”
In discussing the main challenges to structural change posed by the COVID-19 pandemic, Lin emphasized that the pandemic recession will leave developing countries with less resources to allocate to industrial policies for structural change. For a fast, inclusive and sustainable recovery, “we need to aim for a quick-win,” he said. “This implies helping existing firms with trade credit, tax exemption and debt rescheduling to get back to production and to provide jobs, export and revenues.” Then, he concluded “the government can use industrial policy to identify priority industries and facilitate the investments to achieve sustainable industrialization”.
All panellists agreed that industrial policies will have a renewed role in shaping the road towards recovery from the COVID-19 crisis and in ‘building back better.’ Recovery packages should be shaped in a way to accelerate a transformative recovery towards a more inclusive and sustainable industrial development, acceleration that can be supported by the industrial application of advanced digital technologies of the Fourth Industrial Revolution. The importance of aligning efforts to achieve a resilient industrial development will be at the core of the next flagship report of UNIDO, theIndustrial Development Report 2022, which will focus on the impact that the pandemic on the future of industrialization.
About 500 participants from diverse backgrounds followed the “Industrial policy and the road to recovery” webinar via Zoom and YouTube, and contributed to the discussion with a range of interesting questions.
You can watch the recording of the discussion on Youtube.
For more information, please contact:
Nobuya Haraguchi
Chief of the Research and Policy Advice Division, UNIDO
VIENNA, 3 December 2021 - The United Nations Industrial Development Organization (UNIDO) has held a side event titled, “Revival of industrial policy – prospects for establishing a global industrial policy forum for multilateral policy learning and knowledge sharing”, during the organization's 19th General Conference.
The side event was prompted by the urgent need among countries reviving their industrial policies to share experiences and best-practices, and to promote policy learning. In addition, such a forum responds to the renewed interest in industrial policy, and the prominent role of industrial policy in achieving inclusive and sustainable industrial development.
It has become increasingly clear that the levels of knowledge and the capacities required for successful formulation and implementation of industrial policies in the 21st century have significantly risen. Megatrends such as the impact of the pandemic, climate change, greening of industry, restructuring of global production, and digitalization, impose great challenges, particularly for developing countries with low levels of industrial capabilities.
In view of these challenges and building on its unique mandate as the specialized UN organization responsible for fostering ISID, UNIDO together with partners proposes the establishment of a multilateral industrial policy forum to facilitate dialogues, share knowledge and draw from its vast field experiences to inform different aspects of industrial policy.
In his intervention, Hiroshi Kuniyoshi, UNIDO's Deputy to the Director General, emphasized that the forum will be a step towards meeting the increasing demand for the effective use of industrial policies to foster inclusive and sustainable industrial development and achieve the Sustainable Development Goals (SDGs).
The ensuing panel discussion concurred that achieving the SDGs is not possible without industrial policy, and emphasized the importance of strengthening industrial policy capacities of policymakers. These are two imperatives for building resilience, while balancing economic, social and economic outcomes stemming from industrialization.
The panel then concluded to recommend the establishment of a multi-stakeholder forum focusing on industrial policy. Inter alia, the panel proposed that the forum should facilitate the identification of common industrial development priorities among Member States, as well as identifying areas of collaboration and synergies, while enabling the design and implementation of more effective industrial policies.
Another dimension suggested by the panel was that the forum becomes a peer-learning mechanism for new-generation industrial policy formulation. It should also enable discussion that helps translate frontier knowledge and best-practice industrial policies that address pressing industrial development challenges. The panelists agreed that a multilateral industrial policy forum along such lines would greatly benefit Member States in their search for the development approach that suits their particular context, history and level of industrial capabilities. This view was supported by a statement shared online from Annalisa Primi, Head of the Economic Transformation and Development Division of the OECD Development Centre, which also expressed the Division's willingness to contribute to it and join forces with UNIDO in this important effort, thereby expanding fruitful ongoing collaboration with UNIDO.
UNIDO will continue the process towards defining the modalities of the multilateral industrial policy forum, eliciting ideas from Member States and engaging with partner organizations that could help translate these ideas into productive industrial policy action in the Member States.
For further information on the multilateral industrial policy forum, contact:
