Abstract
The rapid evolution of artificial intelligence (AI) has the potential to reshape industrial production and policymaking worldwide. In manufacturing, AI can enhance productivity, efficiency and innovation through applications such as predictive maintenance, quality control and supply chain optimization. Although opportunities offered by AI are abundant, its adoption in industrial production remains slow and uneven. Developing countries face significant barriers to the adoption of AI, including limited infrastructure, skills shortages, financing constraints and restricted access to data. Similarly, the AI development market is becoming more concentrated and capital-intensive, making it difficult for newcomers to enter them. Industrial policy can play a pivotal role in addressing these challenges by supporting AI adoption, fostering capability development, enabling local data ecosystems, and encouraging collaborative innovation. Moreover, AI is starting to emerge as a tool for smarter industrial policymaking by potentially improving governments’ ability to analyse, target and evaluate interventions. Strategic action is urgently required to ensure that AI is a driver of inclusive industrialization, rather than a force that deepens global divides.
Key Messages
1.
Industrial policy can drive
AI adoption, boost local
innovation, and support
collaboration through
coordinated action on
infrastructure, skills,
f
inance, and data sharing.
2. Local data ecosystems are critical for developing context specific AI applications and reducing dependence on foreign platforms.
3. AI applications in policy formulation, implementation, and evaluation can help accelerate and optimize industrial policymaking