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Enhancing UNIDO s Industrial Capacity Building Tools Presentation of key findings from the final report Maria da Graa F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 THE PROJECT Overview and

  1. Enhancing UNIDO ’ s Industrial Capacity Building Tools Presentation of key findings from the final report Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  2. THE PROJECT Overview and objectives Deliverable London School of Economics and Political Science and Project report (10,000 words) delivered 27 April 2015 UNIDO collaboration. The consultancy project is part of the LSE graduate programme MSc Development Management. ? ? ? ? ? Maria da Graça F. A. Prado Michael Mbate Anja Rangette Jonathan Rejaud Armin Scheffczyk Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 2

  3. TABLE OF AGENDA 1 2 3 Conceptual framework Case study: Brazil Case study: Kenya 4 5 Recommendations Q&A Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 3

  4. CONCEPTUAL FRAMEWORK Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 4

  5. RESEARCH QUESTIONS Is evidence-based analysis already part of industrial policy strategies in developing countries and, where it is not, what can it contribute? Is EQuIP a relevant and effective tool capacity-building tool for country- specific industrial diagnosis? Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 5

  6. INDUSTRIAL POLICY IN DEVELOPING COUNTRIES 4. Shortage of trained national analysts 1. Competitive markets • dependency on international • number of competitors consultants • uniformed decision-making • accumulation of capital in industrialized countries Challenges 3. Challenges of evidence-based diagnosis/monitoring 2. Demands on industrial policy • spillover: impact of macro level • economic growth policies • inclusive growth • discrepancy: design vs • sustainable growth implementation stage • multiple rationales: trade-offs and conflicting priorities Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 6

  7. CRITERIA FOR ANALYSIS Relevance Effectiveness • Alignment with key themes of policy • Provide an overview over relevant key plans / political discussion themes • Reflect move towards inclusiveness and • Enable users to conduct independent sustainability analysis: • impact assessment of policy aims • identification of bottlenecks and trade-offs Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 7

  8. METHODOLOGY DATA CASE STUDY DISCUSSION CONCEPTUAL COLLECTION ANALYSIS AND FRAMEWORK SUGGESTIONS 1. Selection of case studies: Brazil, Assessing EQuIP’s Analysis of EQuIP Overarching Kenya relevance and application results in themes of the case effectiveness for the context of study analysis for 2. Application of country industrial industrial policy the application of EQuIP to cases + policy plans EQuIP five benchmarking countries Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 8

  9. Case study BRAZIL Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 9

  10. INDUSTRIAL POLICY HISTORY Industrial, Technology and Foreign Trade Policy (PITCE): emphasis on technology, innovation and exports. Human capital and infrastructure for doing business. Productive Development Policy (PDP): renewed importance on sustainable industrial production, addressing export diversification, SMEs, employment, and promotion regional trade. Greater Brazil Plan (PBM): innovation, technological upgrade, export diversification, human qualification, sustainable production, regional and non-regional focus 2 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  11. POLICY GOALS AND EQUIP EQuIP PITCE PDP PBM ✔ ✔ ✔ Tool 1: Industrial growth and capacity - domestic and export dimensions ✔ ✔ Tool 2: Sub-sector competitive performance ✔ ✔ ✔ Tool 3: Industrial and export upgrading ✔ ✔ Tool 4: Diversification - domestic and export dimensions ✔ ✔ Tool 5: Inclusive industrial development ✔ ✔ Tool 6: Greening industry - energy efficiency and vulnerability ✔ Tool 7: Global Value Chains (GVCs) Tool 8: Industrial organization and firm profiling at sub-sector level ✔ ✔ ✔ Tool 9: Industrial capabilities 23 3 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  12. TECHNOLOGICAL UPGRADE The application of EQuIP shows interlinkages and conflicting objectives that helps in the process of capacity- and skill-building 23 4 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  13. CONCLUSION Other themes of analysis underscore similar conflicts, trade-offs and also synergies in the process of industrial policy implementation. Brazilian case reflects how capabilities are built in this process. In countries with multiple institutional instances involved in industrial policy EQuIP can enhance the communication link between the agencies and ministries. 5 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  14. Case study KENYA Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 14

  15. INDUSTRIAL POLICY HISTORY Objective of Kenya ’ s industrial policy : To promote labor intensive, commodity based, technology-intensive and value added upgrading underpinned by strong infrastructural capabilities. Approach undertaken in the report : Conduct an industrial policy diagnosis to assess how Kenya ’ s performance is aligned or deviates from the set national objectives 2 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  16. POLICY GOALS AND EQUIP EQuIP KNIPF Tool 1: Industrial growth and capacity - domestic and export dimensions Tool 2: Sub-sector competitive performance Tool 3: Industrial and export upgrading Tool 4: Diversification - domestic and export dimensions Tool 5: Inclusive industrial development Tool 6: Greening industry - energy efficiency and vulnerability Tool 7: Global Value Chains (GVCs) Tool 8: Industrial organization and firm profiling at sub-sector level Tool 9: Industrial capabilities EQuIP tool is not only aligned with the objectives of the KNIPF but also introduces new aspects which Kenyan policymakers should be wary of. 23 3 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  17. Industrial performance snapshot SCORECARD: Kenya's Manufacturing Sector Dimensions Industry indicators (MVA) Trade indicators (Exports) 1995 2005 2013* 1995-2013 1995 2005 2013 1995-2013 Structure (%) 9.9% 11.8% 11.7% 1.8 28.1% 32.4% 36.0% 8.0 Capacity (Current USD) 27.6 55.2 129.9 3.7 37.4 61.9 89.9 1.4 Impact (%) 0.01% 0.03% 0.04% 3.08% 0.03% 0.03% 0.03% 0.59% Food, Beverages & Tobacco Dimensions Industry indicators (MVA) Trade indicators (Exports) 1990 2000 2010 1990-2010 1990 2000 2010 1990-2010 Structure (%) 38.5% 33.0% 37.2% -1.3 14.9% 22.7% 22.3% 7.4 Capacity (Current USD) 15.1 11.8 23.8 57% 3.4 4.3 13.7 309.5% Impact (%) 0.1% 0.0% 0.1% 0.0 0.1% 0.1% 0.0% 0.0 EQuIP framework provides policymakers with a comprehensive view of industrial policy at both the macro and sub-sector level:, EQuIP shows that Kenya performed well in both absolute and relative terms, 4 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  18. Misaligned Performance EQuIP highlights that policy makers should be cautious of the static nature of ‘ growth enhancing sectors ’ . Labor intensive sectors are shrinking and capital intensive sectors emerging. Other (most) sectors are stagnant. 5 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  19. Adjusting Priorities ‣ The KNIPF stresses the need for technological upgrade in order to improve export competitiveness Contrary to the objective KNIPF, EQuIP shows that MHT exports stagnated around 10% between 2000-2010. In other countries such as Tanzania and Ethiopia, this performance has regressed overtime. 6 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  20. Assessing infrastructural capacities KNIPF underscores the importance of industrial ‘ enablers ’ , such as infrastructure, finance, energy and innovation.. GERD funding (2010, in %) EQuIP highlights constraints on infrastructural capacities in Kenya, especially the energy sector. 7 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  21. Conclusions 8 Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015

  22. RECOMMENDATIONS Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 22

  23. OVERARCHING FINDINGS Effectiveness Provides an overview over trends in key policy areas Maria da Graça F. A. Prado, Michael Mbate, Anja Rangette, Jonathan Rejaud, Armin Scheffczyk | 29 April 2015 23

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