PRESS CONFERENCE BY UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

PRESS CONFERENCE BY UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

The international community should assist developing countries in formulating and implementing strategies of innovation and learning in order to improve the contribution of industry to their sustainable development, correspondents were told this morning at a Headquarters press conference.

That was one of the highlights of the 2002-2003 Industrial Development Report of the United Nations Industrial Development Organization, (UNIDO), entitled "Competing through innovation and learning" presented by UNIDO's Director of Strategic Research and Economy, Frederic Richard.

Reviewing the industrial performance levels of countries in two years -- 1985 and 1998 –- Mr. Richard said the report notes that industrialized countries continued to do well and improved their performance from 1985 to 1998, while the performance of countries in sub-Saharan Africa, the Middle East, North Africa and Turkey declined.  The 13 countries with the worst performance in industrial development were from Africa, except Nepal.  Developing countries in East Asia however, improved their ratings and some transition economies, like Hungary, also improved.

Specifically, he continued, countries in East Asia took leading positions in both years, and all countries in that region except Hong Kong improved their rankings.  In 1998 China and Philippines improved upon their 1985 rankings by

20 places, Indonesia by 16, and Thailand by 11.  South Asia, Sri Lanka and Bangladesh slightly improved their rankings, while India and Nepal maintained their positions.

Mr. Richard said the international community should ensure appropriate global rules on trade and technology transfer, and also address the gaps in industrial capability to achieve access to and compete in, global markets, in particular for the least developed countries.  Global linkages with business partners and sources of technology, skills and knowledge must also be promoted.

Some of the objectives of the UNIDO report, he continued, were to:  monitor and assess the contribution of industry to growth and sustainable development; understand how firms and industries in developing countries innovate, learn and catch-up; and provide guidelines for strategies and policies to enhance industrial innovation and learning in developing countries.  Industry remained the engine of growth and sustainable development, he said.

He said the report classified industries into resource-based, low technology, medium technology and high technology -- and stressed that under the conditions of competition, the only path to a sustainable industrial development was to compete through innovation and learning.  Innovation in that context meant to improve products and processes in existing industries and to enter into technologically more complex industrial activities and sectors.  The alternative would be to compete through lower wages and standards, or currency depreciation, or to be marginalized.

A scoreboard of the rankings of 87 countries is included in the report, he added, with 57 developing countries, 22 industrialized countries and eight

transition economies.  The scoreboard is based on a Competitive Industrial Performance Index, which depends on each country's share of medium and high technology industries, manufacturing value added, manufactured export per capita, and share of medium and high-technology in manufactured exports.

The scoreboard is also based on industrial capabilities derivable from such domestic drivers as tertiary technical enrolments per 1,000 people, enterprise-financed research and development per capita and infrastructure like telephone main lines per 1,000 people.  Foreign investment and technology were also considered.

* *** *