We live in a complex, changing and challenging world, highlighted on the one hand by resource scarcity, global warming and growing socio-economic disparities, which disproportionately affect developing countries. On the other hand, in the face of these challenges, the world today is also full of technological breakthroughs, which provide unprecedented opportunities to accelerate the promotion of inclusive and sustainable development.

The Industrial Development Report 2024 (IDR24) highlights the key role of the industrial sector in providing sustainable development solutions as it has a huge impact on social and environmental goals. Sustainable industrialization involves tackling climate change, accelerating economic growth, and creating millions of decent jobs while applying cutting-edge technologies. The report highlights that every manufacturing job creates 2.5 jobs in other sectors of the economy, and that manufacturing contributes significantly more to green innovation than other sectors: 60% of global green patents are held by industrial companies. Accelerating sustainable industrial development is therefore critical to achieving the Sustainable Development Goals.

5X00106G01 However, industrialization will not happen on its own. This will require investment, coordinated action and careful policy formulation. The industrial policy of the future cannot simply copy the policies of the past. This report advocates a new era of modern industrial policy with four important elements.

First, modern industrial policies should be aligned with the Sustainable Development Goals. Second, they should be future-oriented, and they must take into account from the outset the megatrems that are reshaping the world: the energy transition, the fourth Industrial Revolution, the rebalancing of global production and trade flows, and demographic supertrends. Third, modern industrial policy should be collaborative. Governments cannot solve today’s challenges alone. The business community 5X00106G01 should work together to contribute to the formulation of policies and ensure their effective implementation in the context of private sector development. Finally, these policies should be coordinated regionally in order to reduce tensions and fully unlock the potential for cooperation among neighboring countries.

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The Industrial Development Report 2024 introduces a new approach to comprehensively assess progress towards sustainable industrialisation. The method takes into account several indicators. In addition to SDG 9 (industry, innovation and infrastructure), it also considers SDG 7 (affordable clean energy) and SDG 8 (decent work and economic growth). This report analyzes the most recent available data from 2021. To assess the pace of progress, the report uses 5X00106G01 pre-COVID-19 data from 2009 to 2019 and assumes that most industrial sectors have already returned to pre-COVID-19 trends or will soon return to them. The results are clear. The world is making too slow progress towards achieving the industrial-related Sustainable Development Goals, and COVID-19 has further undermined that progress. Clean energy, decent work and innovation are three key areas that need urgent attention, especially in developing countries.

In 2021, developing countries are 80 percentage points behind on innovation-related targets in the United Nations 2030 Agenda for Sustainable Development, and disappointingly, pre-COVID-19 progress has been similarly slow. Achieving these goals will take more than a century, as the gap closes by only 0.33 percentage points per year. As a result, even if we return to pre-COVID-19 trends, achieving the goal at this pace is out of reach. A similar story is playing out with jobs and clean energy.

Regional progress assessments show that priority areas for investment and interventions vary from region to region. This fact needs to be taken into account when formulating future industrial policy. For example, in 2021, an average of 90% of the population in developing countries will have access to energy, compared to 60% in Africa. This highlights the urgent need to channel investments aimed at the continent towards energy supply. In addition, the deteriorating performance of the industrial sector in countries in Latin America and the Caribbean, which is already close to the 2030 target, is particularly worrying. Now, the region is showing signs of premature deindustrialization, while developing countries have generally made progress in closing the gap in industrial performance benchmarks.

Without a new level of international cooperation and solidarity, an effective modern industrial policy will not be enough. This requires expertise and technology transfer, as well as investment with a long-term vision for real structural reform. The international community needs to commit to increasing sustainable financing and reforming the global financial system, focusing on equity and the needs of developing countries. In addition, we need to invest more in our most valuable asset, which is to equip the world’s youth population with the skills they need to secure a hopeful future.

This overview paper, prepared for the twentieth session of the General Conference of the United Nations Industrial Development Organization, presents the key findings and key messages of the Industrial Development Report 2024.