Technology as a Driver of Structural Transformation in the LDCs
02 August 2021
VIENNA, 3 August 2021 – At the margins of the second session of the Intergovernmental Preparatory Committee (PrepCom2) of the Fifth United Nations Conference on Least Developed Countries (UN LDC5), the Enhanced Integrated Framework (EIF), together with the United Nations Technology Bank for Least Developed Countries (UN Technology Bank) and the United Nations Industrial Development Organization (UNIDO), organized a high-level side event focused on the role of technology as a driver of structural transformation in the least developed countries (LDCs).
“Industry 4.0 is a reality, also in LDCs”, said Bernardo Calzadilla-Sarmiento, Managing Director, Directorate of Digitalization, Technology and Agri-Business, and Director, Department of Digitalization, Technology and Innovation. “New technologies are being used in creative ways to drive structural transformation; as such, we have to break the idea of sequential industrial transformation”.
Technologies such as artificial intelligence, big data and drones can help enterprises in LDCs enhance their productivity and competitiveness, and move up the value chain ladder in agriculture, industry, and the services sector. Similarly, digital goods and services trade enhances the opportunity for small‑ and medium enterprises (SMEs) to participate in global trade and enhance their financial inclusion.
“Technology has changed the rules of the game and the possibilities are endless”, said Calzadilla-Sarmiento. “While exploring the opportunities, we need to narrow the digital divide, allow LDCs to benefit from the technologies and reduce inequalities, to leave no one behind. In the aftermath of the COVID-19 pandemic, industrialization can also contribute to economic recovery and technology is the fuel to the engine”.
The side event is one of UNIDO’s contributions towards the Fifth United Nations Conference on the LDCs (LDC5), which will take place in January 2022, in Doha, Qatar.
“UNIDO is strongly committed to supporting LDCs in their path towards industrialization and technology-enabled structural transformation”, said Manuel Mattiat, Programme Officer in charge of LDCs matters at UNIDO. “We are eager to use our expertise and networks to provide policy advice and build the capacities and partnerships necessary to increase equitable access enabling the fourth industrial revolution among the LDCs”.
UNIDO suggests that the next programme of action for the LDCs envisages achievable and impactful outcomes on structural socio-economic transformation, especially by developing digital and innovation skills for both women and men, especially in start-ups and Micro, Small and Medium Enterprises (MSMEs). At the same time, it will be essential to address the potential of new partnership models for resource mobilization from various streams such as innovative financing, cost-sharing contributions, and national and international development finance institutions (DFIs).
“To restart economies smartly, intra-regional and continental avenues are important to follow”, said Mattiat. “There is an opportunity for the next programme of action for LDCs to make use of innovative cooperation corridors which are yet to expand, such as the Africa Continental Free Trade Area (AfCFTA) Agreement or South-South and Triangular Cooperation modalities”.
In the lead-up to the UN LDC5, UNIDO will organize a series of activities in support of LDCs, including the 9th Ministerial Conference of the LDCs to be held in November, at its headquarters, as the last pre-event leading towards the UN LDC5 while also preceding the Organization’s 19th General Conference. Throughout these activities, UNIDO will continue to advocate the need for multilateralism to support structural transformation in LDCs well as the need to foster favorable and conducive environments through policy and infrastructure; innovative ecosystems; private sector development; competencies and digital skills; and strong partnerships.
At the same time, UNIDO believes that it is with a sense of urgency that the LDCs needs to be steered onto an environmentally sustainable and carbon-neutral path. For instance, the next programme of action for LDCs is an opportunity to advocate for a global just transition towards an efficient economy for a more equitable use of resources reversing biodiversity loss, and curbing pollution and waste.
“Beyond appropriate policies, this calls for mobilizing the industrial community to leverage investments helping developing countries’ abilities to respond to national, regional and global challenges, including climate change”, said Mattiat. “Mobilizing finance, technology and capacity-building to scaling up economies in developing countries can only be achieved through impactful business models and partnerships with cross-sectoral stakeholders, such as the UNIDO Programme for Country Partnership (PCP)”.
UNIDO will thus continue to upscale its advocacy for LDCs through sharing knowledge, exchanging best practices and showcasing normative outputs.
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