UNIDO policy brief explores the future of AI in industrial development

A new policy brief by Cambridge Industrial Innovation Policy adds to the UNIDO Insights on Industrial Development series, exploring the implications of artificial intelligence (AI) for industrialisation in developing countries.

AI is already reshaping manufacturing systems – enhancing productivity, improving quality control, and enabling more adaptive and data-driven supply chains. However, adoption remains uneven across countries, with many developing economies facing persistent barriers, including infrastructure constraints, skills gaps, limited access to finance, and restricted data availability.

The brief, ‘AI and the future of industry: Challenges and opportunities for developing countries’ explores whether AI will act as an enabler of inclusive industrialisation or contribute to widening global disparities. With appropriate policy frameworks, AI has the potential to support productivity growth and structural transformation. Without them, differences between technology leaders and followers may intensify.

Furthermore, the brief shows that AI is helping reshape and optimise industrial policies themselves, highlighting its transformative potential across policy formulation, implementation, and evaluation.

“AI industrial applications are still early-stage, and without adequate policies, developing countries may fall behind in their adoption. Establishing the right enablers for localised data ecosystems is crucial for maintaining technological sovereignty and domestic value capture.” Mateus Labrunie.

The brief was authored by Mateus Labrunie, David Leal-Ayala and Zongshuai Fan.