The main megatrends reshaping industry.

 

Industrial development is evolving rapidly, driven by global shifts in the world economy, technology and environmental priorities. These trends are Reshaping how industries operate and adapt to new market realities, making it clear that replicating past models of industrial growth is no longer viable. For developing countries, the stakes are particularly high, as they must navigate this new industrial landscape and find innovative pathways to industrialize in a world where traditional approaches are being replaced by new dynamics. Today’s industrial landscape is radically different from the one that first facilitated the rise of the Asian Tigers and later China. In the late 1970s, these countries benefitted from an expansive global policy space, with favourable conditions forexport-led growth and integration into the global economy. At that time, labour-intensive manufacturing created a massive number of jobs, while environmental sustainability was not a central concern. In contrast, the current global context is marked by less policy space due to trade restrictions, deglobalization trends, and heightened geopolitical tensions. At the same time, technological breakthroughs such as automation and digitalization have reduced demand for lowskilled labour and are less conducive to job creation. Lastly, the pressing need to address climate change has turned environmental sustainabilityinto a priority, pushing industries to adoptcleaner technologies and transition towards greener production systems. Looking ahead, tomorrow’s industrial landscape will also differ from today’s. Ongoing and emerging global megatrends are fundamentallytransforming production processes and redefining how industries operate globally. For policymakers and industry leaders, understanding these structural shifts will be essential for navigating the complexities of future industrialization and formulating strategies that align with the evolving global landscape. 

In this section, we focus on four of these megatrends: 

1) energy and the green transition; 

2) the rise of AI and the digitalization of production; 

3) GVC reconfiguration; and

4) global demographic changes. 

In what follows, we provide a brief summary of each of these megatrends, exploring their implications for industrial development and the challenges and opportunities they present.