Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

The manufacturing industry’s recovery from COVID-19 remains incomplete and uneven: some high-income regions achieved record-high manufacturing value added per capita in 2022 but levels in LDCs were not much higher than the 2015 baseline. In the aftermath of the pandemic, data show that higher-technology industries recovered faster and proved to be more resilient, pointing to the need to promote innovation and technology transfer in a way that benefits all countries. To achieve Goal 9 by 2030 it is essential to support LDCs, invest in advanced technologies, lower carbon emissions, and increase global mobile broadband access.

• Target 9.2: Global manufacturing value added (MVA) per capita increased from $1,646 (constant 2015 prices) in 2015 to $1,875 in 2022. While Europe and Northern America reached an all-time high of $5,052 in 2022, MVA per capita in LDCs reached only $159, far from the target of doubling their value of $126 in 2015. Although the share of manufacturing in LDCs increased from 12.1% in 2015 to 14.0% in 2022, this pace is not sufficient to achieve the target of doubling the share by 2030. While LDCs in Asia have made considerable progress and are on track, African LDCs will need to significantly accelerate progress for the goal to remain attainable by 2030.
• Target 9.2: After a plunge in 2020, global manufacturing employment returned to the pre-pandemic level in 2021. However, the share of manufacturing employment in total employment continued to decline, falling from 14.3% in 2015 to 13.6% in 2021 worldwide.
• Target 9.4: Global carbon dioxide (CO2) emissions from energy combustion and industrial processes grew by 0.9% in 2022 to a new all-time high of 36.8 billion tonnes. Emissions shrank by more than 5% in 2020, but rebounded past pre - pandemic levels in 2021, growing more than 6% in tandem with economic stimulus and a surge in coal demand even as renewables capacity additions scaled record heights. CO2 growth in 2022 was well below GDP growth of 3.2%.
• Target 9.b: In 2022, the medium-high and high-technology industries experienced solid growth, mainly due to the recovery in the automotive sector and consistently strong production in sectors such as computers, electronics and optical products, and electrical equipment. However, the production of basic pharmaceuticals declined due to the COVID-19 situation and shortages of essential inputs. In 2020, sub-Saharan Africa and LDCs had low shares of medium-high and high-technology manufacturing, at 21.7% and 10.6% respectively, compared to 47.7% in Europe and Northern America and 47.1% in Eastern Asia.
• Target 9.c: Mobile broadband (3G or above) access is available to 95% of the world’s population, while 4G coverage has doubled to 88% between 2015 and 2022. However, growth is slowing down, and connecting the remaining 5% is proving difficult. In Sub-Saharan Africa, the gap is 18%, predominantly affecting the population of Central and Western Africa. The coverage gap is almost the same in LDCs and LLDCs

The manufacturing industry exhibited a recovery from the pandemic in 2021, although the rebound has been uneven across countries, with stagnations in least developed countries. Almost one in three jobs in the manufacturing industry were negatively impacted during the pandemic. Higher-technology industries had a better performance and recovered faster, providing a strong example of how important technological innovation is for achieving Sustainable Development Goal 9.

In 2021, global manufacturing activity rose above the pre-pandemic level but the recovery remains incomplete and unequal. Manufacturing in least developed countries stagnated owing to subdued and volatile global demand and disruption to global trade, in addition to tighter domestic economic policies. Despite the pandemic disruptions, the global share of manufacturing value added in total GDP increased from 16.2 per cent in 2015 to 16.9 per cent in 2021. While manufacturing value added per capita in Europe and Northern America reached an all-time high of $5,006 in 2021, in least developed countries it decreased to $134.

Because of the pandemic, nearly one in three jobs in manufacturing supply chains globally are likely to have undergone termination, a reduction in working hours or payment or other worsened conditions. The share of manufacturing employment in total employment thus decreased significantly from 13.7 per cent in 2019 to 13.1 per cent in 2020.

Small industrial enterprises are more vulnerable than larger firms to economic downturns owing to their limited financial resources and greater supply chain dependencies. Although governmental support plays a key role in supporting small enterprises in their efforts to survive and thrive during and after the crisis, such a stimulus is hardly available in low-income countries. Based on survey data from 2006–2020, only 15.7 per cent of small-scale industries in sub-Saharan Africa received loans or lines of credit compared with 44.2 per cent in Latin America and the Caribbean.

Global CO2 emissions declined by 5.8 per cent in 2020 or by almost 2 billion tons, the largest decline since 1990 and almost five times greater than the 2009 decline which followed the global financial crisis. Despite the 2020 decline, global energy-related CO2 emissions remained at 31.5 billion tons, which contributed to the attainment by CO2 of its highest average annual concentration in the atmosphere. In 2021, global energy-related CO2 emissions rose by 6.0 per cent to 36.3 billion metric tons, their highest ever level, as demand for coal, oil and gas rebounded with the economy.

Most of the industries using medium and high technology have reached pre-pandemic levels, except for motor vehicles and other transport equipment. The production of motor vehicles is facing larger challenges worldwide owing to disruptions of the supply chain for resources and intermediate goods. However, the share of medium- and high-technology manufacturing in total manufacturing was only 21.4 per cent in sub-Saharan Africa and 10.5 per cent in least developed countries, compared with 47.7 per cent in Europe and Northern America in 2019.

In most developing countries, mobile broadband (third generation (3G) or above) is the main means – and often the only means – of connecting to the Internet. Currently 95 per cent of the world population has access to a mobile broadband network. Between 2015 and 2021, 4G network coverage doubled to reach 88 per cent of the world’s population. However, the coverage gap remains significant in least developed countries and landlocked developing countries, where 17 per cent of the population remains without any access to a mobile broadband network.

Source: Progress Towards Sustainable Development Goals- Report of the Secretary-General 

For more information, please, check: https://unstats.un.org/sdgs/report/2022/

In the year before the COVID-19 pandemic triggered the greatest economic crisis in decades, manufacturing value added had seen the slowest year-on-year growth rate since 2012, primarily because of tariff and trade tensions between the most dominant economies. The pandemic has hit the manufacturing and transport industries hard, causing job losses and declining incomes for workers in those sectors. The crisis poses unprecedented challenges for global value chains by disrupting both the supply of and the demand for goods. Small-scale industries have been severely affected, and many continue to face existential challenges. However, the COVID-19 crisis also offers opportunities to foster industrialization and bring groundbreaking technologies to developing countries.

According to data from 2018 and 2019 on the 25 countries and territories in Africa, Asia, South America, Central Asia and the Middle East for which the Rural Access Index of the World Bank was updated using a spatial method, almost 300 million out of 520 million rural dwellers still lack reliable access to roads.

Growth in maritime freight volumes and global container port traffic weakened in 2019, expanding at the marginal rates of 0.5 and 2 per cent, respectively, compared to 2018. As a result of the COVID-19 pandemic, the volume of international maritime freight is expected to have fallen by 4.1 per cent and global container port traffic by 2.1 per cent in 2020.

The pandemic affected manufacturing by disrupting global value chains and restricting the movement of people and goods, resulting in a significant drop of 8.4 per cent in manufacturing production in 2020. The global share of manufacturing value added in GDP fell from 16.5 per cent in 2019 to 15.9 per cent in 2020.

Manufacturing in the least developed countries is expected to have grown by a negligible 1.2 per cent in 2020, compared to 8.7 per cent in 2019, helping the least developed countries to increase their share of manufacturing value added to 12.8 per cent in 2020 from 10.1 per cent in 2010. However, the growth rate is too slow to meet the target of doubling the share of industry in GDP by 2030. Manufacturing value added per capita in 2020 was only $135 in the least developed countries, compared to $4,194 in Europe and Northern America.

In 2019, 13.7 per cent of global workers, or 454 million people, were employed in manufacturing, one of the sectors hardest hit by the pandemic. Across 49 countries and territories with data, manufacturing employment declined by an average of 5.6 and 2.5 per cent in the second and third quarters of 2020, respectively, compared to the same periods in 2019.

Small-scale industries have been significantly affected by the pandemic, and many continue to face existential challenges. According to survey data for the period from 2006 to 2020, 29.3 per cent of small-scale entrepreneurs benefited from loans or lines of credit before the crisis, with some regional differences. Only 15.7 per cent of small-scale industries in sub-Saharan Africa received those forms of credit, compared to 44 per cent in Latin America and the Caribbean.

Global carbon dioxide emissions from fuel combustion declined slightly in 2019 from a historic high of 33.5 billion tons in 2018, owing mainly to changes in power sources in advanced economies and milder weather conditions across the continents. Global carbon dioxide emissions from manufacturing continued their decline since 2014 and accounted for 5.9 billion tons in 2018. Although the world experienced a remarkable drop in carbon dioxide emissions as a result of national lockdowns and travel restrictions in 2020, most economies are likely to resume their usual levels of carbon dioxide emissions as soon as the lockdown measures are lifted.

The proportion of global GDP invested in research and development rose at a satisfactory pace, from 1.61 per cent in 2010 to 1.73 per cent in 2018. However, countries and territories in most of the developing regions fell short of the world average, some spending less than 1 per cent of GDP on research and development

Globally, there has been an increase in the number of researchers per million population from 1,022 in 2010 to 1,235 in 2018, ranging from 3,847 in Europe and Northern America to only 99 in sub-Saharan Africa. In addition, women represented only 30.5 per cent of global researchers in 2018.

Total official flows for economic infrastructure in developing countries reached $63.6 billion in 2019, an increase of 39.6 per cent in real terms since 2010. The main sectors assisted were transport ($21.3 billion), and banking and financial services ($15.3 billion).

In 2018, the share of medium- and high-technology manufacturing in total manufacturing was 49 per cent in developed regions and 41.4 per cent in developing regions, compared to only 8.9 per cent in the least developed countries. The pandemic affected different industries unequally. Medium- and high-technology industries, such as the pharmaceutical, computer, electronics and automotive sectors, have recovered faster from the crisis than industries involving a lower technological intensity.

The roll-out of mobile broadband networks slowed in 2020. Almost 85 per cent of the global population was covered by a 4G network at the end of 2020, following a twofold increase in coverage since 2015. However, annual growth has been slowing gradually since 2017, with the result that coverage in 2020 was only 1.3 percentage points higher than in 2019.

Source: Progress towards the Sustainable Development Goals – E/2021/58

Global growth in manufacturing had already steadily declined even before the outbreak. The pandemic is hitting manufacturing industries hard and causing disruptions in global value chains and the supply of products.

The air transport sector has been hit the hardest by the pandemic. It is forecasted that airlines will have 1.5 billion fewer international air travellers in 2020 and that international seat capacity could fall by almost three quarters, resulting in a $273 billion loss, compared with previously expected gross operating revenues.

In 2019, manufacturing value added grew only 1.5 per cent since 2018, the slowest year-on-year growth rate since 2012, influenced primarily by tariff and trade tensions affecting all regions. Manufacturing activities are at high risk of disruption during the current crisis, which will have an impact on the sector’s employment levels.

The share of manufacturing in GDP in least developed countries increased, from 10 per cent in 2010 to 12.4 per cent in 2019, but the growth rate was too slow for the target, doubling the industry’s share in GDP by 2030, to be reached.

In 2019, 14 per cent of the world’s workers were employed in manufacturing activities, a figure that has not changed much since 2000. The share of manufacturing employment was the largest in Eastern and South-Eastern Asia (18 per cent) and the smallest in sub-Saharan Africa (6 per cent).

According to surveys covering the period from 2010 to the present, in developing countries, 34 per cent of small-scale industries benefit from loans or lines of credit, which enable them to integrate into local and global value chains. However, only 22 per cent of small-scale industries in sub-Saharan Africa received loans or lines of credit, compared with 48 per cent in Latin America and the Caribbean.

After three years of stability, global carbon dioxide emissions from fuel combustion started to rise again in 2017, reaching 32.8 billion tons, underpinned by economic growth and a slowdown in efficiency improvements. However, the intensity of global carbon dioxide emissions has declined by nearly one quarter since 2000, showing a general decoupling of carbon dioxide emissions from GDP growth. The same trend was visible in manufacturing industries after 2010, with global manufacturing intensity falling at an average annual rate of 3 per cent until 2017.

Globally, investment in research and development as a proportion of GDP increased, from 1.5 per cent in 2000 to 1.7 per cent in 2015, and remained almost unchanged in 2017, but was only less than 1 per cent in developing regions.

The number of researchers per 1 million inhabitants increased, from 1,018 in 2010 to 1,198 in 2017, ranging widely, from 3,707 in Europe and Northern America to only 99 in sub-Saharan Africa. In addition, women represented only 30 per cent of global researchers.

Total official flows for economic infrastructure in developing countries reached $61 billion in 2018, an increase of 32.6 per cent in real terms from 2010. The main sectors assisted were transport ($22.8 billion) and energy ($20.3 billion).

The share of medium-high and high-technology goods in world manufacturing production reached nearly 45 per cent in 2017. Medium-high and high-technology products continued to dominate manufacturing production in developed regions, reaching 49 per cent in 2017, compared with 9 per cent in least developed countries.

Nearly the entire world population lives in an area covered by a mobile network. It is estimated that, in 2019, 96.5 per cent thereof was covered by at least a 2G network, with 81.8 per cent covered by at least a long-term evolution network.

Source: Progress towards the Sustainable Development Goals, Report of the Secretary-General, https://undocs.org/en/E/2020/57

Aspects of the prevailing global economic environment have not been conducive to rapid progress on Sustainable Development Goal 9. While financing for economic infrastructure has increased in developing countries and impressive progress has been made in mobile connectivity, countries that are lagging behind, such as least developed countries, face serious challenges in doubling the manufacturing industry’s share of GDP by 2030, and investment in scientific research and innovation remains below the global average.

• Efficient transportation services are key drivers of economic development, and more than 80 per cent of world merchandise trade by volume is transported by sea, making maritime transport a critical enabler of trade and globalization. International maritime freight increased by an estimated 3.7 per cent globally in 2017 and projected growth will test the capacity of existing maritime transport infrastructure to support increased freight volumes.
• In 2018, global manufacturing slowed in both developing and developed regions. The slowdown was attributed mainly to emerging trade and tariff barriers that constrained investment and future growth. Despite this slowdown, the global share of GDP in terms of manufacturing value added increased marginally from 15.9 per cent in 2008 to 16.5 per cent in 2015, but stalled at the same level in 2018. The share of manufacturing in least developed countries remained low, posing a serious challenge to the target of doubling the industry’s share of GDP by 2030.
• Meanwhile, the share of manufacturing employment in total employment declined from 15.3 per cent in 2000 to 14.7 per cent in 2015 and to 14.2 per cent in 2018, as countries gradually reallocated production factors from agriculture and low-value added manufacturing towards high-value added manufacturing and services.
• The intensity of global carbon dioxide (CO2) emissions from manufacturing industries declined by more than 20 per cent between 2000 and 2016, to 0.30 kg CO2 per United States dollar, showing a general decoupling of CO2 emissions and GDP growth.
• The proportion of global GDP invested in research and development increased from 1.52 per cent to 1.68 per cent from 2000 to 2016, with Europe and Northern America standing at 2.21 per cent of GDP spent on research and development and most developing regions falling short of the world average in 2016.
• While there has been an increase in the number of researchers per million inhabitants from 804 in 2000 to 1,163 in 2016, that number reached only 91 in sub-Saharan Africa.
• Total official flows for economic infrastructure in developing countries reached $59 billion in 2017, an increase of 32.5 per cent in real terms since 2010. Within this total, the main sectors assisted were transport ($21.6 billion) and banking and financial services ($13.4 billion).
• In 2016, medium-high and high-tech sectors accounted for 44.7 per cent of the global manufacturing value added. Medium-high and high-tech products continued to dominate manufacturing production in Northern America and Europe, reaching 47.4 per cent in 2016 compared with 10.4 per cent in least developed countries.
• Almost all people around the world now live within range of a mobile-cellular network signal, with 90 per cent living within range of a 3G-quality or higher network. This evolution of the mobile network, however, is growing more rapidly than the percentage of the population using the Internet.

Source: Report of the Secretary-General, Special edition: progress towards the Sustainable Development Goals

Steady progress has been made in the manufacturing industry. To achieve inclusive and sustainable industrialization, competitive economic forces need to be unleashed to generate employment and income, facilitate international trade and enable the efficient use of resources.

• The global share of manufacturing value added in GDP increased from 15.2 per cent in 2005 to 16.3 per cent in 2017, driven by the fast growth of manufacturing in Asia.
• Globally, the carbon intensity decreased by 19 per cent from 2000 to 2015— from 0.38 to 0.31 kilograms of carbon dioxide per dollar of value added.
• In 2015, medium-high- and high-technology sectors accounted for 44.7 per cent of total manufacturing value added globally. The value added reached 34.6 per cent in developing economies, up from 21.5 per cent in 2005.
• By 2016, the proportion of the population covered by a third generation (3G) mobile broadband network stood at 61 per cent in the LDCs and 84 per cent globally.

Source: Report of the Secretary-General, The Sustainable Development Goals Report 2018

Despite steady improvements in manufacturing output and employment, renewed investment will be needed in the least developed countries to build needed infrastructure and ensure the doubling of industry’s share of GDP in those countries by 2030.

• Efficient transportation services generate employment and wealth and drive economic development. In 2015, the estimated global economic impact (both direct and indirect) of air transport was $2.7 trillion, equivalent to 3.5 per cent of global GDP. The least developed countries, landlocked developing countries and small island developing States represent far less air travel and freight volumes, with each country group accounting for only 1 per cent to 2.7 per cent of the global total.
• Manufacturing is a principal driver of economic development, employment and social stability. Globally, manufacturing value added as a share of GDP increased from 15.3 per cent in 2005 to 16.2 per cent in 2016. In 2016, manufacturing value added per capita amounted to $4,621 in Europe and Northern America, compared to about $100 in the least developed countries.
• As many countries move to more efficient and less energy-intensive industries, their emissions of carbon dioxide per unit of manufacturing value added are generally declining. From 2000 to 2014, Europe and Northern America reduced their emissions intensity by 36 per cent. All of the 10 largest manufacturing countries saw decreases in their emissions intensity. Such promising trends are not reflected in the global emissions intensity level, however, since a significant share of global manufacturing value added has moved to countries with generally higher intensity levels.
• In 2014, investments in research and development stood at 1.7 per cent of global GDP, up from 1.5 per cent in 2000. Worldwide, there were 1,098 researchers per million inhabitants in 2014, ranging from 63 in the least developed countries to 3,500 in Europe and Northern America.
• ODA for economic infrastructure in developing countries reached $57 billion in 2015, an increase of 32 per cent in real terms since 2010. The main recipient sectors were transport and energy ($19 billion each).
• Manufacturing is increasingly shifting towards more technologically complex products. While medium- and high-tech products continue to dominate manufacturing production in industrialized economies (where they contribute about 80 per cent of total manufacturing output), the share has barely reached 10 per cent in least developed countries.
• Mobile-cellular services have spread rapidly and have allowed people living in previously unconnected areas to join the global information society. In 2016, 95 per cent of the world’s population and 85 per cent of people in the least developed countries were covered by a mobile-cellular signal.

Source: Report of the Secretary-General, "Progress towards the Sustainable Development Goals", E/2017/66

• Goal 9 encompasses three important aspects of sustainable development: infrastructure, industrialization and innovation. Infrastructure provides the basic physical systems and structures essential to the operation of a society or enterprise. Industrialization drives economic growth, creates job opportunities and thereby reduces income poverty. Innovation advances the technological capabilities of industrial sectors and prompts the development of new skills.
• An important component of physical infrastructure is air shipping and air travel. In 2014, 45 per cent of all air passengers originated from developing regions; 55 per cent originated from developed regions. However, in the least developed countries, landlocked developing countries and small island developing States, air passenger volume was extremely low, making up only 0.8 per cent, 0.8 per cent and 1.4 per cent, respectively, of the global total. Similar patterns are found for freight volumes in air transit: the least developed countries, landlocked developing countries and small island developing States made up only 1.1 per cent, 0.9 per cent and 2.6 per cent of the global total, respectively, in 2014.
• Manufacturing is a foundation of economic development, employment and social stability. In 2015, the share of manufacturing value added in terms of GDP of developed regions was estimated at 13 per cent, a decrease over the past decade owing largely to the increasing role of services in developed regions. In contrast, the share of manufacturing value added in GDP remained relatively stagnant for developing regions, increasing marginally from 19 per cent in 2005 to 21 per cent in 2015. Those values hide substantial differences, with manufacturing value added contributing over 31 per cent to GDP in Eastern Asia and 10 per cent or less in both sub-Saharan Africa and Oceania. The least developed countries face particular challenges in industrializing. Although those countries represent 13 per cent of the global population, they contribute less than 1 per cent of global manufacturing value added. Worldwide, about 500 million people are employed in manufacturing. While manufacturing job numbers have fallen in industrialized countries, they have steadily increased in developing countries. In the least developed countries, agricultural and traditional sectors remain the main sources of employment.
• In developing countries, small-scale industries accounted for an estimated 15 per cent to 20 per cent of value added and 25 per cent to 30 per cent of total industrial employment in 2015. However, access to financial services in those countries remains a problem. Globally, the credit gap for small and medium enterprises (defined as having between 5 and 99 employees) was estimated at $3.2 trillion to $3.9 trillion in 2012. In emerging markets, between 45 per cent and 55 per cent of all small and medium enterprises are unserved or underserved by financial services.
• As the structure of world economies shifts to less energy-intensive industries and countries implement policies for enhanced energy efficiency, almost all regions have shown a reduction in carbon intensity of GDP. Global carbon dioxide emissions per unit of value added showed a steady decline between 1990 and 2013, a decrease of about 30 per cent.
• Innovation and the creation of new and more sustainable industries are spurred by investments in research and development. Global expenditure on research and development as a proportion of GDP stood at 1.7 per cent in 2013. However, this figure masks wide disparities. expenditure on research and development was 2.4 per cent of GDP for developed regions, 1.2 per cent for developing regions, and below 0.3 per cent for the least developed countries and landlocked developing countries. The number of researchers per 1 million inhabitants showed a similar pattern. While the global average was 1,083 researchers per 1 million inhabitants, the ratio ranged from 65 per 1 million in the least developed countries to 3,641 per 1 million in developed regions.
• Total official flows for economic infrastructure in developing regions reached $59.5 billion in 2014. The main sectors receiving assistance were transport and energy.
• Infrastructure and economic development also rely on information and communications technology. Mobile cellular services have spread rapidly around the world, allowing people in previously unconnected areas to join the global information society. By 2015, the percentage of the population living in areas covered by mobile broadband networks stood at 69 per cent globally. In rural areas, the share was only 29 per cent.

Source: Report of the Secretary-General, "Progress towards the Sustainable Development Goals", E/2016/75