The SDG Roundtable: SDG 9 – Industry, Innovation and Infrastructure

According to the United Nations, Investments in infrastructure, transport, irrigation, energy, and industry innovations are crucial in achieving a level of sustained development while empowering communities. Eight targets specifying the goal and twelve indicators representing the metrics by which the targets are to be achieved fall under the ninth sustainable development goal. The targets revolve around developing resilient infrastructures, sustainable industrialization, increasing access to financial markets, enhancing research while upgrading technologies and facilitating universal access to information and communication technology.

Functioning and resilient infrastructure is the foundation of every successful community. In order to face future challenges, while upgrading infrastructure and promoting technologies, we should ensure that they are universally accessible. Inclusive and sustainable industrialization, together with innovation and infrastructure, can unleash dynamic and competitive economic forces that generate employment and income. They play a key role in introducing and promoting new technologies, facilitating international trade and enabling the efficient use of resources. 

An International Perspective

Uncertainties due to climate change including disaster risks and tightening financial stresses all demand a flexible approach to infrastructure development. The Asian Development Bank (ADB) notes that critical infrastructure in the region remains far from adequate in many countries, despite the rapid economic growth and development the region has experienced over the past decade. In terms of communications infrastructure, more than half of the world’s population is now online, but developing nations still face challenges due to lower coverage, high costs and lack of devices to access information.

Global manufacturing growth has been declining prior to the COVID-19 pandemic as well, primarily due to tariff and trade tensions including the trade war between the most dominant economies. However, the pandemic is hitting manufacturing industries tremendously causing disruptions in global supply chains. Impacts of the pandemic range from unemployment to declining incomes of workers’ in both manufacturing and related transport industries. According to a general survey of 49 countries, manufacturing employment declined by an average of 5.6% and 2.5% in the second and third quarters of 2020, respectively, compared to 2019. Manufacturing in the least developed countries has been estimated to grow by around 1.2% last year, to 8.7% in 2019. Small-scale industries have been severely affected by COVID-19, nevertheless the pandemic can offer opportunities to foster industrialization and bring new technologies, which is a positive outcome amidst all the negatives.

Innovation coupled with technological progress can provide solutions to environmental, economic and developmental challenges. Globally, investment in research and development as a proportion of GDP increased to 1.73% in 2018, but was only less than 1% in developing regions. Global carbon dioxide emissions from fuel combustion declined slightly in 2019 from a historic high of 33.5 billion tons in 2018. Although the world experienced a remarkable drop in carbon dioxide emissions as a result of lockdowns and travel restrictions in 2020, most economies are likely to resume their usual levels as soon as the lockdown measures are lifted. 

Progress  in Sri Lanka.

Sri Lanka was ranked 101 out of 131 countries in the Global Innovation Index in 2020 with a lower value than the median. Growth of the industrial sector is mainly driven by construction and mining and quarrying activities, but less by the manufacturing sector. The manufacturing sector has remained highly concentrated among apparel, rubber products and other labour intensive industries producing goods of low technological intensity. According to the World Bank database, research and development expenditure in Sri Lanka only adds up to around 0.11% of total GDP. Major challenges that hinder industrialization and the manufacturing sector in Sri Lanka include the lack of entrepreneurship, innovations, technology and management skills, low investor confidence, shortage of labour, poor diversification of products, the quality of the domestic market as well as problems of gaining access to international markets.  Financing the SDGs have always been a challenge due to lack of government income and funding. Measures have been taken to attract FDI and boost export earnings including implementation of a new national export strategy and easing business environment by digitising company registration and land registry. Coordination among government organizations should be enhanced to implement effective infrastructure projects and maintain the developments.

The challenges were more crucial with the COVID-19 pandemic, and the importance of achieving this goal is highlighted now more than ever.

– Rtr. Kavindi Gunawardena