Global Trends and World Order: Implications for New Industrial Policies in Developing Countries

In this paper, we take stock of recent debates in scholarly work and actual policymaking practice on industrial policy. Moreover, the paper identifies how developing countries are responding to structural trends such as digitalization, decarbonization and recalibration of global production, which are shaping the future of industrial development, and the scope of industrial policy. These trends are compounded with short-term effects from post-pandemic recovery, international conflict, and macroeconomic instability. Furthermore, the paper examines trends in industrialized countries towards the explicit use of industrial policies to promote and safeguard strategic national interests. All these factors result in an increasingly complex environment around industrial development which should open opportunities and challenges for developing countries. We offer some recommendations for industrial policy in developing countries, in ways that balance between national interests, the scope for regional coordination and collaboration, the international governance around industrialization, and the commitments of the global community towards the UN 2030 Development Agenda and its associated Sustainable Development Goals (SDGs).