The United Nations Industrial Development Organization (UNIDO) launched the Industrial Development Report 2009, entitled Breaking in and moving up: New industrial challenges for the bottom billion and the middle-income countries.
Following some examples of industrial successes in developing countries, the report warns that “despite such overwhelming evidence of manufacturing success in developing countries, a substantial part of the world remains at risk of failing to establish a vibrant, competitive industrial economy.” These countries – the so-called bottom billion and the middle-income countries that don’t seem to be able to catch up with the more industrialized countries – are therefore the focus of this report.
It looks at three aspects of structural change in industry: production, location and output. According to the report, paths to industrial development differ and are not linear. They differ from country to country and it depends on the path taken by a country to what extent the type of industries change and evolve. It also finds that what countries manufacture (in terms of sophistication and product diversification) matters for their development and growth, as well as the location of a production process. There seems to be a tension between the equal distribution of manufacturing jobs and manufacturing efficiency, the report notes.
The report further underlines that it is important to understand industrialization and the processes of structural change in order to guarantee that economic policy responses are appropriate. It emphasizes that the bottom billion and the slow-growing middle-income countries face different opportunities and challenges. However, in both cases “industrial development policies must address the infrastructure gap, trade logistics, spatial industrial location and regional integration.”
The full report is available online.