Adding the resilience dimension to industrial policy: Lessons from COVID-19

This paper discusses the role of industrial policy in strengthening the social and economic resilience of nations, building on guidance offered by the Sendai Framework and reflecting on lessons learned from the COVID-19 pandemic, as well as previous crises.

First, the paper briefly discusses the importance of manufacturing industries for building resilience across a number of dimensions: as the provider of goods critical to life and national security; as the source of essential goods needed to tackle emergencies; and as a contributor to economic recovery and growth. Recognising that the first priority of the Sendai Framework is understanding risk in all its dimensions, this paper discusses the evolving risks associated with modern manufacturing globa value chains—across supply, operations and demand—and illustrates how these risks have manifested in practice.

This paper then identifies an industrial policy toolkit, with measures and activities to address those risks and strengthen resilience across the “four phases” of emergency management: (i) prevention, (ii) preparedness, (iii) response, and (iv) recovery from the pandemic. Examples of implementation are drawn from international experience.

Finally, the paper discusses the implications, with an emphasis on the challenges to effective policy implementation in developing countries. While this study is formulated in the context of a pandemic that is still ongoing, the insights offered can support policymakers’ efforts to use post-disaster reviews as opportunities to support learning and inform policy thinking.

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