Second Meeting of the E15 Expert Group - Industrial Policies in Lower Middle Income Countries
1. Industrial Policies in Lower
Middle Income Countries
Francesca Guadagno, Policy Officer, Economic
Transformation and Trade
4 December 2014
Second Meeting of the
E15 Expert Group
2. • LMICs underwent structural change from
agriculture to manufacturing.
• LMICs are specialized in low-tech industries,
but medium and high-tech manufacturing
industries play an increasing role.
• 2 challenges:
Increasing productivity in labour-intensive
industries employment creation
Diversify production structures towards
increasingly sophisticated products avoid
competition with LICs, improve job quality, …
Some characteristics and
challenges of LMICs
Page 2ECDPM
3. • Case 1: Pharmaceuticals in India
Patent reform allowing for low-cost
production of patented drugs +
knowledgeable SOEs
• Case 2: Aerospace in India
Offset policy + cluster policy
• Case 3: Automotive in Indonesia
LCR with insufficient incentives for
capabilities accumulation for auto-parts
production
Capabilities as condition for
success
ECDPM Page 3
4. • Capabilities’ accumulation as an important
objective of IP in LMICs.
How international trade policy regimes can
facilitate this?
Opportunities for imitation? (role of patent
reform in Indian Pharma)
• There are some exceptions and grey areas
(e.g. offset policies in Indian aerospace
industry).
• Innovation policies are common in HICs and
UMICs, but are the least exploited area of IP
in LMICs.
Implications for international
trade policy regime
ECDPM Page 4