Our world is facing tremendous challenges: climate change, resource depletion and the destruction of our environment. Continued widespread poverty and hunger are further worsened by armed conflicts and political instability. These challenges result from a complex web of factors. Some are deeply rooted in history, woven into long-standing consumption and production patterns and deprivation in developing countries. Others are more recent, such as demographic shifts and migration, energy crises, and disruptions in global supply chains. Regardless of these factors’ origins, one thing is clear: the world’s poorest suffer the most from these crises. The exploitation of people and planet must end. Thus we must answer the question: what solutions can we offer to these challenges? Sustainable industrialization is a powerful catalyst for transformative global progress. History shows that the most successful countries are those that have transitioned from being low to high-income through industrialization. Why? Because manufacturing drives productivity and growth, spurring technological advancement and innovation, and creating opportunities in manufacturing and beyond. Every manufacturing job, on average, creates more than two jobs in other sectors of the economy. However, history also teaches us that industrial development can have detrimental impacts on both people and the planet.
What we need is a new approach to industrialization, one that prioritizes social and environmental goals to make sure that we prioritize lifting people out of poverty, ending hunger, and effectively fighting climate change. This paper, prepared for the second edition of UNIDO’s Multilateral Industrial Policy Forum (MIPF 2024), highlights a critical issue: the countries most in need of industry’s transformative power to drive growth are falling behind. With a few notable exceptions, developing countries are witnessing alarmingly slow industrialization or even de-industrialization. We need immediate action. The future of sustainable industrial growth depends on our ability to address these challenges swiftly and effectively, while navigating the fundamental shifts reshaping the industrial sector. The ongoing energy transition, rapid technological advancements including artificial intelligence, the reconfiguration of global value chains and the evolving nature of how we work and what we consume are just some of the megatrends revolutionizing industrial production and are shaping the industries of the future. How can countries build competitive, future-ready industries?
This paper identifies several key areas for action: We need to improve basic conditions such as in infrastructure and institutional capabilities. We must equip work-forces with future-ready skills We need to enable the use of emerging technologies and help build competitive industrial ecosystems with strong connections to complementary service and agricultural activities. We must strengthen regional integration to address the fragmentation of global supply chains. We have the technologies, expertise and money to provide effective solutions to address these global challenges. Our goal is a world without hunger and poverty, where industry creates decent jobs and shared prosperity for all, drives low-emission economies, and safeguards our planet for current and future generations. No country can confront these challenges on their own. What we need is true global solidarity and robust international partnerships. We live in an interdependent world, everything is interconnected. Global developments ultimately impact us all. Industrialized countries must live up to their commitments to the developing world. The private sector must play its part. Despite all of the challenges facing us, together we can ensure sustainable industrialization benefits not just some of us, but all of us.
Gerd Müller Director General of UNIDO.
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