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INDUSTRIAL
DEVELOPMENTREPORT
2026UNITEDNATIONSINDUSTRIAL
DEVELOPMENTORGANIZATION
progressbyinnovationTHE
FUTURE
OFINDUSTRIALIZATIONFULLREPORTBuilding
future-readyindustries
for
sustainabledevelopmentSUSTAIlNABLEDEVELOPMENTUN
DODisclaimerThe
designations
employed
and
the
presentationofthe
material
inthisdocumentdo
not
imply
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of
any
opinion
whatsoever
on
the
partofUNIDOSecretariatconcerningthelegalstatusofanycountry,territory,city,orareaor
ofits
author-ities,or
concerning
the
delimitation
of
its
frontiersorboundaries,oritseconomicsystemordegreeofdevelopment.Designationssuchas“GlobalSouth”,
“developed”,“industrialized”,“industrializing”
or“developing”
are
intended
for
statistical
conve-nienceanddonotnecessarilyexpressa
judgementaboutthestage
reached
byaparticularcountry
orareain
thedevelopmentprocess.Themapsusedinthisreportare
forillustrativepurposesonlyanddonotimply
theexpressionof
anyopinionon
thepart
of
UNIDO,concerning
thelegal
statusof
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territory
or
concerning
the
delimitation
of
fron-tiersor
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en-
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EvantoandFreepikunlessotherwisestated.For
reference
and
citation,
please
use:
United
Na-tionsIndustrialDevelopment
Organization,
2025.
Industrial
Development
Report
2026.
The
Future
of
Industrialization.BuildingFuture-readyIndustries
for
SustainableDevelopment.
Vienna.The
fullreportisavailableat
www.uniPrintedonrecycledpaper.About
UNIDOTheUnitedNationsIndustrialDevelopmentOrgani-zation(UNIDO)isa
specializedagencyof
theUnited
Nations
withauniquemandate
topromote,dynam-izeandaccelerate
sustainableeconomicand
indus-trial
development.Our
mandate
is
reflected
in
Sustainable
Develop-ment
Goal
(SDG)
9:
“Build
resilient
infrastructure,promote
inclusive
and
sustainable
industrializationandfoster
innovation”,
but
UNIDO’sactivities
con-tribute
toall
the
SDGs.UNIDO’svisionisaworldwithoutpovertyandhun-
ger,
whereindustrydriveslow-emissioneconomies,improves
living
standards,and
preserves
the
envi-ronment
forpresent
and
future
generations,leaving
noonebehind.UNIDOprovides
support
to
its
Member
Statesthrough
fourmandated
functions:
technicalcooper-ation;
action-oriented
research
and
policy-adviso-ryservices;
normativestandards-relatedactivities;and
fosteringpartnerships
forknowledgeand
tech-nology
transfer.Our
workisconcentratedon
three
focusareas:end-inghungerbysupportingsustainablefoodsystemswith
modern
agri-tech
and
agribusiness;
tacklingclimatechangebyusingrenewableenergyandenergy
efficiency
to
reduce
industrial
greenhouse
gas
emissions;
and
supporting
sustainable
supplychainssothatdeveloping
country
producersget
afairdealandscarceresourcesarepreserved.INDUSTRIALDEVELOPMENTREPORT2026THEFUTUREOFINDUSTRIALIZATIONBUILDINGFUTURE-READYINDUSTRIESFOR
SUSTAINABLEDEVELOPMENTFULLREPORTUNITED
NATIONSINDUSTRIALDEVELOPMENTORGANIZATIONVienna,November
2025UN
DTHEFUTUREOFINDUSTRIALIZATIONCHAPTER
1
The
future
world
and
therole
of
industrial
development................221.1Our
world
in
2050
....................................................................................................................................
241.2Industry
is
essential
for
development
..............................................................................................
271.3
The
industrialization
gap......................................................................................................................281.4
The
future
of
industry
under
the
current
path................................................................................
33CHAPTER
2Megatrends
and
theindustry
of
the
future.....................................................402.1
The
key
megatrends
reshaping
industry...........................................................................................
422.2Energy
and
the
green
transition
.........................................................................................................
432.3
The
rise
of
AI
and
the
digitalization
of
production........................................................................482.4
The
reconfiguration
of
global
supply
chains
...................................................................................
522.5Population
growth
and
the
changing
nature
of
work
...................................................................
552.6
The
transformation
of
food
production
systems
...........................................................................58CHAPTER
3Building
future-readyindustries
.............................................................................643.1Preparing
domestic
ecosystems
for
tomorrow’s
industrial
landscape
.....................................663.2Improving
infrastructure.......................................................................................................................
673.3
Strengthening
institutions
...................................................................................................................693.4Equipping
the
workforce........................................................................................................................713.5Mastering
the
new
technologies.........................................................................................................
733.6Coordinating
industrial
efforts
at
the
regional
level
....................................................................
763.7Greening
industrial
ecosystems.........................................................................................................
783.8Financing
future
industrial
transformation....................................................................................80CHAPTER
4
Shifting
course
towards
a
sustainable
future...............................................844.1
Actions
for
sustainable,
future-ready
industries............................................................................864.2
The
industrialization
push
in
developing
countries......................................................................
874.3
The
clean
energy
and
just
industrialization
push
towards
a
sustainable
future
..................904.4Key
priorities
for
global
action
...........................................................................................................
93ContentsFOREWORD......................................................................................................
10EXECUTIVE
SUMMARY
....................................................................................12ACKNOWLEDGEMENTS..................................................................................
16ABBREVIATIONS
AND
TECHNICALNOTES.................................................
18PART
AIDR26
|
5PARTBREGIONALPERSPECTIVESCHAPTER
5
Africa:Challengesandopportunitiesforfutureindustrialization
...........................................................................................................1025.1Recent
and
future
industrial
dynamics
...........................................................................................1045.2Main
bottlenecks
constraining
future
industrialization
.............................................................1085.3
Sectoral
opportunities
to
spur
future
industrialization
..............................................................111CHAPTER
6
Asia-Pacific:
Challengesandopportunitiesforfutureindustrialization
...........................................................................................................1226.1Recent
and
future
industrial
dynamics
...........................................................................................
1246.2Main
bottlenecks
constraining
future
industrialization............................................................
1286.3
Sectoral
opportunities
to
spur
future
industrialization.............................................................
132CHAPTER
7EasternEurope
and
Central
Asia:
Challenges
andopportunities
for
futureindustrialization...............................................................1447.1Recent
and
future
industrial
dynamics
...........................................................................................
1467.2Main
bottlenecks
constraining
future
industrialization
.............................................................
1507.3
Sectoral
opportunities
to
spur
future
industrialization
.............................................................
153CHAPTER
8Latin
America
and
the
Caribbean:
Challenges
andopportunities
for
futureindustrialization...............................................................1648.1Recent
and
future
industrial
dynamics...........................................................................................
1668.2Main
bottlenecks
constraining
future
industrialization............................................................
1708.3
Sectoral
opportunities
to
spur
future
industrialization..............................................................174PARTCANNEXES
ANDREFERENCESAnnexes............................................................................................................................
188A.1Projections
to
2050under
different
scenarios..............................................................................
189A.2
Assessing
regional
bottlenecks
for
the
future
of
industrialization.........................................
193A.3Country
and
economy
groups
...........................................................................................................
195References.......................................................................................................................
2026
|
IDR26CONTENTLIST
OFBOXES
Box
3.1China:Infrastructure
policies
for
future-ready
industries........................................................................................69Box
3.2India:
Skill
development
in
the
renewable
energy
sector........................................................................................
73Box
3.3Brazil:
Supporting
industrial
ecosystems
to
boost
firms’competitiveness.........................................................
75Box
5.1Morocco:
Towards
an
electric
mobility
ecosystem....................................................................................................
114Box
5.2Kenya:Emerging
ecosystem
for
electric
two-and
three-wheelers.......................................................................115Box
5.3Nigeria:
Scaling
up
production
of
essential
medicines............................................................................................117Box
5.4
South
Africa:Promotingagroprocessing
throughclimate-smart
technologies................................................
119Box
6.1Indonesia:Critical
minerals
processing
and
the
electric
vehicles
industry.......................................................
134Box
6.2Oman:Boostinglocalcapacityinphotovoltaicmanufacturing
toachievecarbonneutrality......................
135Box
6.3China:Phased
and
holistic
policy
mix
for
the
mobility
sector
.............................................................................
136Box
6.4
Sri
Lanka:Building
a
competitive
garment
industry
...............................................................................................138Box
6.5India:
Acceleratinginnovationin
thecommunicationandelectronicsindustry
.............................................
139Box
7.1Poland:Fosteringcleanenergyindustrialization
throughbattery
valleys
.........................................................
156Box
7.2
Slovenia:Upgrading
in
the
wood-based
construction
industry
...........................................................................158Box
7.3Croatia:
Anemergingecosystem
fordigitalmanufacturing
...................................................................................
159Box
7.4Georgia:
Theemergenceof
ahigh-valueagroprocessingindustry
.......................................................................161Box
8.1Brazil:Driving
the
green
industrial
transition
with
biomass...................................................................................177Box
8.2Mexico:
AutomotiveindustryasacorecomponentofFactory
America.............................................................
179Box
8.3CostaRica:Leveragingglobalinvestments
tobuildarobustsemiconductorindustry..................................180Box
8.4Chile:Regulationanddigital
technologiesasapivot
for
the
food-processingindustry...............................
182Box
A.1
Africa.....................................................................................................................................................................................
195Box
A.2
Americas..............................................................................................................................................................................
195Box
A.3
Asia-Pacific
.........................................................................................................................................................................196Box
A.4Europe
.................................................................................................................................................................................196Box
A.5Oceania
...............................................................................................................................................................................196Box
A.6High-income
industrial
economies(HIIEs)
................................................................................................................
197Box
A.7High-income
industrializing
economies(HINGEs)....................................................................................................
197Box
A.8Upper
middle-income
economies(UMIEs)
................................................................................................................
197Box
A.9Lower
middle-income
economies(LMIEs)..................................................................................................................198Box
A.10Low-income
economies(LIEs)
.....................................................................................................................................198IDR26
|
7LIST
OFFIGURES
Figure
1.1
What
can
we
expect
for
2050?......................................................................................................................................24Figure
1.2Where
will
extremepoverty,malnourishment
and
climate-related
fatalitiesbe
concentrated
in
2050?................26Figure
1.3How
does
industry
address
global
challenges?......................................................................................................
27Figure
1.4Industrial
dynamics
in
the
first
quarter
of
the
21st
century................................................................................29Figure
1.5
The
changing
structure
of
global
industrial
production
......................................................................................30Figure
1.6Industrial
intensity
gap:Developingregionsproduceless
than
they
should,
given
theirpopulation
size
.............
31Figure
1.7Productivitygap:Developingregionslagbehind
the
technological
frontier..................................................
31Figure
1.8Environmentalefficiencygap:Developingregionsproducelessoutputperunitofmanufacturingemissions
than
advanced
economies
.......................................................................................................................32Figure
1.9Projected
structure
of
global
industrial
production
by
2050
..............................................................................33Figure
1.10Projectedindustrialdynamismin
the
secondquarterof
the
21stcentury
...................................................34Figure
1.11Industrializationgapsbydevelopingregions,current
valuesandprojections
for2050............................36Figure
2.1Demand
forenergyisexpected
to
grow
significantly,butonly
a
few
are
sourced
fromrenewables
...............43Figure
2.2Industrial
firmsindevelopingcountriesarelaggingbehindin
thegreen
technologyrace
.......................44Figure
2.3From
traditional
to
digital
manufacturing
...............................................................................................................48Figure
2.4Digital
technologies
and
the
servification
of
industry
.........................................................................................49Figure
2.5
The
rise
of
AI
...................................................................................................................................................................49Figure
2.6In
the
current
path
scenario,
global
rebalancing
is
expected
to
continue......................................................
52Figure
2.7Chinaand
theUnitedStatesaregraduallydecouplingandreshapingGVCs..................................................53Figure
2.8Regions
are
taking
advantage
of
decoupling..........................................................................................................54Figure
2.9
The
changing
global
demographic
structure...........................................................................................................56Figure
2.10
Jobs
areincreasinglyinformal
acrossdevelopingregions,disproportionately
affecting
women
..................
57Figure
2.11Developingcountriesprojected
toneedmore
than900millionnew
jobsby2050due
todemographic
and
technological
changes
...............................................................................................................58Figure
2.12Future
fooddemand
willoutpacelocalsupplyinmanydevelopingregions................................................59Figure
3.1Developingcountriesshowstrongdeficienciesinboth
traditionalandmoderninfrastructure...............68Figure
3.2Developingeconomieslagbehindin
thedevelopmentof
governmentcapacity
.........................................70Figure
3.3Developing
countries
show
strong
deficiencies
in
digital
skills..........................................................................71Figure
3.4Developing
countries
have
weak
industrial
innovation
ecosystems
................................................................
74Figure
3.5Intra-regional
tradeinmanufacturinggoodsbetweendevelopingcountriesremainslow
.......................
77Figure
3.6Developingcountriesareleadinginrenewableenergyuse,butlagbehindinindustrialmaterialefficiency...........................................................................................................................................................................
78Figure
3.7
A
significant
shareof
developingcountriesisin,orathighriskof,debtdistress........................................80Figure
4.1
Analysing
alternative
future
scenarios......................................................................................................................86Figure
4.2
A
shift
towards
stronger
industrialization
in
developing
countries..................................................................88Figure
4.3Projectedoutcomesindevelopingcountriesby
2050under
anindustrializationpush
scenario....................89Figure
4.4
Towardsa
stronger,
fairerand
greenerindustryindevelopingcountries
......................................................
91Figure
4.5Projectedoutcomesindevelopingcountriesby2050underacleanenergyand
justindustrialization
push
scenario
..................................................................................................................................
92Figure
5.1
Africa:Industrial
dynamics
in
the
first
quarter
of
the
21st
century
.................................................................105Figure
5.2
Africa:Currentandprojecteddistributionof
industrialproductionin
theregion
.....................................106Figure
5.3
Africa:Industrializationgapsbysubregions,current
valuesandprojections
for2050
.............................
107Figure
5.4Industrializationenablers:
Africacompared
to
the
world
frontier
andotherdevelopingregions.................109Figure
5.5Informality
and
gender
imbalances
in
Africa’s
manufacturing
sector.............................................................111Figure
6.1
Asia-Pacific:Industrialdynamicsin
the
firstquarterof
the
21stcentury.......................................................
125Figure
6.2
Asia-Pacific:Currentandprojecteddistributionof
industrialproductionin
theregion...........................
1268
|
IDR26CONTENTLIST
OF
TABLES
Table
2.1Newchallengesandopportunities
for
futureindustrializationina
greener
world
.......................................46Table
2.2Potential
applications
of
AI
in
manufacturing
.........................................................................................................
51Table
2.3
Transition
of
food
systems
in
developing
economies............................................................................................60Table
4.1Industrialization
push
in
developing
countries
.......................................................................................................88Table
4.2Clean
energy
and
a
just
industrialization
push
in
developing
countries
.........................................................90Table
5.1
Africa:Listof
economiesbygeographicalareaandstageof
industrialdevelopment
................................104Table
5.2
Africa:Megatrends,driversand
sectoralopportunities
for
futureindustrialization...................................112Table
6.1
Asia-Pacific:Listof
economiesbygeographicalareaandstageof
industrialdevelopment......................
124Table
6.2
Asia-Pacific:Megatrends,driversand
sectoralopportunities
for
futureindustrialization
........................
133Table
7.1EasternEuropeandCentral
Asia:Listof
economiesbygeographicalareaandstageof
industrialdevelopment...................................................................................................................................................................146Table
7.2EasternEuropeandCentral
Asia:Megatrends,driversandsectoralopportunities
for
futureindustrialization.............................................................................................................................................................
155Table
8.1LAC:Listof
economiesbygeographicalareaandstageof
industrialdevelopment
....................................166Table
8.2LAC:Megatrends,driversand
sectoralopportunities
for
futureindustrialization.......................................
175Table
A.1Economies
included
in
the
intervention
group......................................................................................................190Table
A.2Interventions
in
the
industrialization
push
scenario
...........................................................................................
191Table
A.3Interventions
in
the
clean
energy
and
just
industrialization
push
scenario..................................................
192Table
A.4Indicators
used
in
regional
assessments
of
bottlenecks....................................................................................194Figure
6.3
Asia-Pacific:Industrializationgapsbysubregions,current
valuesandprojections
for2050
..................
127Figure6
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