The catch-up challenge: Industrialization and structural change

In recent years there has been a renewed interest in the role of industrialization in promoting sustained economic growth and development, reflected in Goal 9 of the 2030 Agenda for Sustainable Development which calls for promoting inclusive and sustainable industrialization. Five important factors have contributed to this revival of interest. First, many developing countries have failed to deepen and diversify their existing industrial capacity in a more open global economy; indeed, several of them have experienced a premature decline in the share of manufacturing in their gross domestic product (GDP). Second, there is a perception that export-led growth strategies in developing countries face more constraints than in the past, in particular due to the slower growth of global demand, especially from industrialized countries. Third, many developing countries continue to remain vulnerable to external trade and financial shocks. Fourth, and related to the latter point, there has been an end to the enormous windfall gains from primary exports generated by the commodity price boom during the first decade of the 2000s, which saw accompanying growth and investment spurts. And lastly, further deindustrialization in several developed countries is being observed with growing concern.

Related Subject(s): International Trade and Finance