The role of industrial policy in shaping a more resilient Southeast Asia

By Mateus Labrunie

Manufacturing plays a central role in building resilience across societies. It ensures access to essential goods, supports emergency response, and provides a foundation for long-term growth. The Lloyd’s Register Foundation World Risk Poll illustrates that, compared to other sectors, the manufacturing sector generates higher-paid, safer, and less discriminatory jobs, while continuously seeking to improve itself.

Manufacturing as a foundation for resilience

Manufacturing supports resilience in three crucial ways. First, it ensures domestic access to critical goods when imports falter. From food and fuel to communications infrastructure, the ability to produce essentials locally becomes a national safeguard.

Second, the sector enables crisis response. Countries with strong industrial bases were able to rapidly adapt during the pandemic, producing personal protective equipment, ventilators, and treatments when global supplies ran short.

Third, manufacturing supports economic recovery. It remains a key driver of growth and high-quality employment and often provides economic stability even in periods of broader downturn.

Aligned with this, industrial performance is closely tied to resilience at a national level. Countries with stronger manufacturing sectors (measured by UNIDO’s Competitive Industrial Performance index) tend to have higher scores in the World Risk Poll Resilience Index, which assesses how well countries and individuals can withstand and adapt to crises (Chart 1). This correlation is even stronger in Southeast Asian countries.

A stronger industry means stronger communities

Beyond country-level benefits, manufacturing delivers a suite of social and financial benefits that reinforce resilience at the individual level. Indeed, for many indicators related to socio-economic resilience, manufacturing is the leading sector worldwide (Chart 2).

For example, workers in manufacturing globally report lower rates of serious physical harm and discrimination compared to many other sectors, reflecting strict occupational health, safety, and non-discrimination regulations.

Manufacturing jobs—typically formal, well-paid, and stable—also confer greater financial security: a larger share of these workers can sustain household needs for months if their income is lost. Mental health outcomes similarly tend to be better, with a smaller share of workers’ self-reported serious mental health issues than in any other sector.

Moreover, the sector continually invests in new technologies and practices—autonomous vehicles, robotics for hazardous tasks, and enhanced safety protocols—so that over 40% of manufacturing workers worldwide now feel safer than they did five years ago (the highest proportion across sectors).

These trends demonstrate manufacturing’s capacity for ongoing safety improvements, inclusive workplaces, and financial resilience, all critical for sustaining a productive and adaptive workforce.

About the project

Through the project Policymaking for a more resilient world: leveraging the World Risk Poll for more effective digital, labour, and industrial policies, funded by Lloyd’s Register Foundation, Cambridge Industrial Innovation Policy (IfM Engage) will investigate the evolving landscape of global risks and the role of manufacturing and industrial policy in mitigating them, with a particular focus on Southeast Asia.

A policy brief will be published summarising these findings and providing policy recommendations that will outline the vital role of industrial policy in mitigating socio-economic risks in Southeast Asia.

Findings will be shared through a mix of activities designed to reach key stakeholders. These include in-person and online workshops with representatives from national governments and regional or international bodies. Accessible materials such as short video explainers and infographics will be used to raise awareness of risk and enhance understanding of how policymaking can play a vital role in keeping people safe.

The project began in September 2024 and will run until December 2025. It was selected as part of Lloyd’s Register Foundation’s ‘World Risk Poll into action’ funding call. Three other policy briefs will be produced as part of this project. These will cover the following topics:

• AI frameworks and regulations for safe and inclusive AI use,
• Digital economy agreements, including regulations for cross-border data flows,
• Labour policies to mitigate workplace risks.

Find out more about the project