How Can Progress on Infrastructure, Industry and Innovation Contribute to Achieving the SDGs?

Sustainable Development Goal 9 (SDG 9) is based on three interconnected pillars: infrastructure, industry and innovation. These pillars all share the objective of achieving socially inclusive and environmentally sustainable economic development. Realizing SDG 9 by 2030 will require overcoming resource constraints, building and strengthening developing countries’ capacities, and exploring innovative ways to solve development challenges, in order to build resilient infrastructure, promote sustainable industrialization and foster innovation. SDG 9 has approximately 20 targets and indicators related to its three pillars and is closely linked to other SDGs related to job creation, sustainable livelihoods, improved health, technology and skills development, gender equality, food security, green technologies and climate change.

SDG 9 is one of the SDGs that will be reviewed by the 2017 session of the High-level Political Forum on Sustainable Development (HLPF), which is convening under the theme ‘Eradicating poverty and promoting prosperity in a changing world’ from 10-19 July 2017. In addition to SDG 9, the HLPF will review six other SDGs: SDG 1 (no poverty), SDG 2 (zero hunger), SDG 3 (good health and well-being), SDG 5 (gender equality), SDG 14 (life below water), and SDG 17 (partnerships for the Goals).

This policy brief reviews progress on SDG 9 and considers the role of SDG 9 in achieving other SDGs. The brief reflects on relevant events leading up to the HLPF, including the UN Economic and Social Council’s (ECOSOC) Special Meeting on ‘Innovations in Infrastructure Development and Promoting Sustainable Industrialization,’ the Multi-Stakeholder Forum on Science, Technology and Innovation for the SDGs (STI Forum) and the UN General Assembly (UNGA) High-Level SDG Action Event on Innovation and Connectivity, all of which took place in May 2017.

The brief also draws on the ‘2017 HLPF Thematic Review of SDG 9’ and other reports to illustrate gaps and challenges in achieving SDG 9. The Review considers progress on SDG 9 at the global level, explaining, for example, that East and South Asia have made significant progress, while industrialization levels remain low or have stagnated in Sub-Saharan Africa. The Thematic Review highlights a significant increase in mobile coverage and Internet access globally, while acknowledging that coverage and access vary depending on the country, region and level of economic development. In addition, the Review underscores linkages with and positive impacts on other SDGs, as infrastructure, industry and innovation are enablers of growth and sustainable development and can enable SDG implementation more broadly.

Events, Articles and Publications Related to SDG 9

The second annual Multi-Stakeholder Forum Science, Technology and Innovation for the SDGs (STI Forum) addressed ‘STI for a Changing World – Focus on SDGs 1, 2, 3, 5, 9, and 14.’ An IISD Reporting Services briefing note and an IISD SDG Knowledge Hub story explain that the Forum featured innovation pitches for scientific and technological solutions addressing the six SDGs, including: a platform for job seekers in India to apply for jobs; a knowledge exchange system connecting farmers in rural areas in Bangladesh with experts from cities all over the world through smart phones; and a ‘virtual farmers market’ in Zambia. The event identified takeaways as, inter alia, the need for: incentives to strengthen the science-policy interface through the UN; private sector investment in innovation for the SDGs; roadmaps for tracking progress; ICT infrastructure expansion for development and STI efforts; advancing on ways to align STI national plans with the SDGs; and the STI Forum to conduct a “horizon-scanning” exercise on changes in the STI field. During the event, UNGA President Peter Thomson emphasized the need to manage risks associated with STI advancements, including protection from cyberattacks, privacy concerns and loss of jobs due to innovation. The STI Forum convenes annually to discuss cooperation on STI around thematic areas for SDG implementation.

Immediately following the STI Forum, the UNGA President convened an SDG Action Event on Innovation and Connectivity, during which representatives from major corporations, many from Silicon Valley, engaged with countries on how emerging technologies can help implement the SDGs. Participants urged countries to foster a culture of risk-taking while also discussing anxiety posed by technological change and how to overcome it. UN Deputy Secretary-General Amina Mohammed called SDG 9 a “docking station” for all 17 Goals. UNGA President Peter Thompson said the meeting had “planted a seed” about the need for an innovation mechanism at the UN. Governments also, inter alia, stressed the need to: address citizens’ fears about losing jobs to technology and help them prepare for new jobs; and provide resources for countries to implement new technologies and close the digital divide.

Also in an effort to advance SDG 9, ECOSOC convened a Special Meeting on Innovations in Infrastructure Development and Promoting Sustainable Industrialization that highlighted SDG 9’s relevance and interlinkages with other Goals and targets. Two preparatory events convened in advance of the Special Meeting: one focused on infrastructure development and promoting sustainable industrialization (Dakar, Senegal, on 26 March); and one on agriculture and agro-industries development (Victoria Falls, Zimbabwe, from 24-26 April). The preparatory meetings helped ensure consideration of perspectives from Africa and countries in special situations, which lag behind in poverty eradication, infrastructure and industrialization.

The meeting identified infrastructure’s potential and limitations and pointed to infrastructure, industrial production, technology, and digital economies as key drivers of growth and poverty eradication. ECOSOC President Frederick Shava highlighted that lack of transport, energy and communications in Africa limits opportunities, and lamented “so much untapped potential,” stressing people’s desire and capacity to create and innovate. UN High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (OHRLLS), Fekitamoeloa Katoa ‘Utoikamanu, underscored the importance of ICTs for vulnerable countries, citing their multiplier effects in agriculture, education, health, trade, and governance. The Meeting also sought to promote development cooperation and attract investment, and strengthen ECOSOC’s policy guidance with respect to SDG 9.

An IISD SDG Knowledge Hub guest article by the World Wide Web Foundation describes the gender digital divide and why it should matter for the SDGs. The article explains that extreme gender inequalities exist in Internet access, digital skills and online rights across developing countries, due to high costs, lack of digital skills, scarcity of content relevant to women’s empowerment, and barriers to women speaking freely and privately online. The article recommends that countries undertake efforts to close the gender digital divide, which will help realize, inter alia: SDG target 9.c (achieve universal affordable Internet access by 2020); SDG target 1.4 (ensure equal access to basic services and appropriate new technology for women and men); and SDG target 5.b (implement policies to empower women through technology).

An UN Conference on Trade and Development (UNCTAD) publication, the World Investment Report 2017: Investment and the Digital Economy, finds that, while digital enterprises (Internet and e-commerce platforms) have grown dramatically, more than 60 of the top 100 are based in three countries (the US, the UK and Germany) and only four are based in developing countries. An UNCTAD press release explains that the report urges targeted investment policies in developing countries to build connectivity infrastructure, promote digital firms and support digitalization of the broader economy.

HLPF Thematic Review of SDG 9

In preparation for the HLPF, the UN Executive Committee on Economic and Social Affairs (ECESA) Plus produced the 2017 HLPF Thematic Review of SDG 9, with the International Telecommunication Union (ITU), UNCTAD, the UN Educational, Scientific and Cultural Organization (UNESCO), the UN Industrial Organization (UNIDO), the World Intellectual Property Organization (WIPO), and the World Bank as co-leads. The Review focuses on: a global perspective on SDG 9; linkages with other SDGs; challenges; financing SDG 9 implementation; partnerships; and recommendations. Some of the more salient details from the brief, as well as other relevant points, are highlighted and elaborated on below.

A global perspective on SDG 9

The Thematic Review considers progress made on SDG 9 targets. As noted in the introduction, East and South Asia have made significant progress towards realizing the Goal while industrialization levels remain low or have stagnated in Sub-Saharan Africa. The Review discusses indicators and metrics to evaluate industry, innovation and infrastructure at the global level, including manufacturing employment, mobile and Internet penetration, and research and development (R&D) expenditures.

According to the Review, progress on SDG target 9.2 in global manufacturing employment over time is mixed. For example, the Secretary-General’s report on ‘Progress towards the SDGs’ states that global employment in manufacturing and manufacturing-related services grew from around 262 million in 1970 to 482 million in 2014. However, in relative terms, the proportion of those employed in manufacturing decreased between 1970 and 1990 and has been remained stable due, in large part, to a structural shift away from direct employment in manufacturing in developed countries, and a trend towards more technologically complicated products and emerging technologies, such as automation technology, robotics and artificial intelligence. The increase in absolute numbers, on the other hand, is the result of rapid population growth. The SDG Progress Report finds that, in 2016, manufacturing value added per capita totaled approximately US$4,600 in Europe and North America, compared to about US$100 in least developed countries (LDCs). While medium- and high-tech products contributed around 80% of total manufacturing output in developed countries, the share is less that 10% in LDCs.

SDG target 9.3 recognizes the importance of access to financial services, including credit for small-scale industries in developing countries. The Review explains that while 80% of SMEs have access to some financial services, only 37% receive the necessary credit to compete, grow and create more jobs in the formal sector. SME finance can help advance SDG 9, as well as progress on SDG 8 (decent work and economic growth) and SDG 5, if such access covers women-owned firms.

The Review also discusses mobile network coverage (SDG target 9.c.1), which increased from 41.7% in 2006 to 95% of the world’s population and 85% of people in LDCs covered by a mobile cellular signal by the end of 2016. However, while the spread of Internet access is driven by mobile technologies, more than half the world’s population still lacks Internet access, which is limited and unaffordable for many, particularly in LDCs. Approximately 11.1% of households in LDCs had Internet access at the end of 2016, compared to 83.8% in developed countries. Such divides also apply to larger and smaller enterprises and urban and rural areas. The Review describes how Internet access by individuals and enterprises, particularly SMEs in LDCs, can improve access to services and resources that support many Goals and targets related to health, education, women’s empowerment, financial inclusion, integration of SMEs into value chains and markets, and increased exports from developing countries.

Linkages with other SDGs

SDG 9 has interlinkages with many other Goals and targets, including industry-related targets associated with job creation, sustainable livelihoods and food security, for example. In addition, innovation is required for the delivery, distribution and consumption of energy, food, water, and housing, while access to ICTs is critical for achieving SDG 4 (quality education), SDG 8 and SDG 10 (reduced inequalities), among others. Some examples of linkages between SDG 9 and other SDGs are elaborated below.

Linkages with SDG 3 (good health and well-being): Improved access to electricity, transportation and modern ICT provides significant health benefits through mhealth (mobile health) and e-health, which can empower community health workers to deliver better care at lower costs.
Linkages with SDG 5 (gender equality): Improved Internet access and enabling technology will help promote women’s empowerment (SDG target 5.b), and bridge the gender digital divide, a major obstacle to women’s participation in the digital economy. Currently, women are approximately 50% less likely than men to be online in urban poor areas, for example.
Financial services (SDG target 9.3) and linkages with SDG 5 and SDG target 8.3 (SME growth through access to financial services): Increased access to financial services, particularly for women and for micro, small and medium-sized rural and agri-food enterprises, can lead to increased investments in rural and agri-food and contribute to progress on other SDGs and relevant targets.
ICTs and linkages with other SDGs: As noted in UNCTAD’s World Investment Report 2017, investment in the digital economy is directly linked to and supports SDG targets that mention ICTs, including SDG target 9.c (universal affordable Internet access), SDG target 4.b (enrollment in higher education), SDG target 5.b (women’s empowerment), and SDG target 17.8 (STI capacity building). ICTs can also catalyze other SDGs and investments in them, leading to innovation and new opportunities in, inter alia, agriculture, health, education, economic growth, and climate change.

Challenges

The Thematic Review describes a number of challenges in achieving SDG 9. The Review emphasizes that many efforts to overcome these gaps and obstacles are underway but will require significant financing and political will. This section provides a brief snapshot of key challenges that are critical for advancing progress on SDG 9 and the SDGs, more generally.

One challenge is the need to improve Internet access by micro and SMEs in developing countries, particularly LDCs. The Review observes that sometimes access does not translate into use because of issues related to affordability, low ICT literacy rates, scarce local content, and lack of trust. Building ICT skills of individuals and enterprises, developing relevant Internet content, strengthening regulatory frameworks and promoting trust can help ensure that improved access leads to improved use.

Another challenge relates to inadequate transport, which leads to higher trading costs, decreased export competitiveness and less attraction for foreign direct investment (FDI), particularly in landlocked developing countries (LLDCs). Overcoming this challenge requires transit cooperation, multimodal transport, transport corridors, and efficient transit facilities. In addition, poor access to infrastructure, particularly for transportation, electricity and energy, hinders development, diversification and value addition in agriculture and agro-industry in rural areas, especially in sub-Saharan Africa.

On SDG target 9.5, global R&D expenditure has grown, with investments in R&D totaling 1.7% of global GDP in 2014, as noted in the SDG Progress Report; however, significant disparities exist among regions. For example, R&D expenditure was 2.4% of GDP in developed countries, 1.2% for developing countries and 0.3% for LDCs. Disparities also exist regarding the number of researchers per million people, with a global average of 1,098 researchers in 2014, 3,739 per million in developed countries and only 63 researchers per million in LDCs.

Financing implementation of SDG 9

The Thematic Review explains that financing SDG 9 implementation will require significant investments in infrastructure and innovation and presents examples of how investments in SDG 9 can also contribute to progress on other SDGs. While progress has been made, significantly more financing and investments are required to achieve SDG 9.

The Thematic Review states that: over 1.1 billion people lack access to electricity; 663 million people lack access to clean water; 2.4 billion require adequate sanitation; and one third of the world’s population is not served by all-weather roads. While official development assistance (ODA) to developing countries for economic infrastructure, primarily in transport, totaled around US$57 billion in 2015, an increase of 32% since 2010 (SDG Progress Report), closing these gaps will require large investments of approximately US$1-1.5 trillion annually in infrastructure, innovation and industry in developing countries.

In addition, the Review points out that investments in local infrastructure and technologies, such as water pumps, electricity, clean cook stoves, mini-grids, mills and grinding machinery, and transport, can support local and inclusive growth, increase efficiency, and reduce time taken up by ‘caring activities,’ particularly for women. The Review also highlights some challenges to financing at this level, explaining that: investing in rural, small-scale infrastructure usually requires high transaction costs and difficulties in achieving economies of scale; and large-scale penetration of financial services in the agri-food and rural sectors, which are often composed of small-scale operators, presents obstacles related to lack of credit records and access to collateral.

To enhance financing and investments, the Review discusses the need to, inter alia:

invest in secondary rural roads, which contribute to private sector productivity, poverty reduction, school enrollment, access to health services, economic growth and women’s empowerment, given that many rural and remote areas are cut off from markets and public services;
support ‘last mile’ infrastructure requirements, such as reducing rural-urban inequalities and supporting local food systems; and
utilize financing tools for investing in infrastructure projects that help empower women economically, and track the impact of these investments.

Partnerships, initiatives and tools

SDG 9 has catalyzed action on a number of partnerships, initiatives and tools, which have in turn contributed to further progress on SDG9 and other SDGs, as detailed below.

UNIDO’s Programme for Country Partnership (PCP) solicits investments to support inclusive and sustainable industrialization at the country level. Each PCP is aligned with the national industrialization priorities and development plans of the beneficiary country, which must incorporate the PCP into their resource mobilization strategies and partner to scale up technical cooperation services and leverage additional resources.
eTrade-for-All, an UNCTAD initiative, provides a multi-stakeholder platform to leverage e-commerce for development by pooling development partner and private sector resources and facilitating access to beneficiaries. The platform helps developing countries unlock the potential of e-commerce, assisting with e-commerce assessments, ICT infrastructure and services, payments, trade logistics, legal and regulatory frameworks, skills development, and financing for e-commerce.
The Better Than Cash Alliance (BTCA), hosted by the UN Capital Development Fund (UNCDF), advocates the use of digital payments for their efficiency and decreased waste. A press release highlighting a recent Alliance case study describes how the agriculture nonprofit organizationOne Acre Fund, partnering with Citi Inclusive Finance, successfully digitized loan repayments for farmers in Kenya, which increased transparency and efficiency, as well as economic opportunity and financial inclusion for thousands of smallholder farmers.
ITU’s Connect 2020 Agenda focuses on: enabling and fostering access to and increasing use of ICTs; bridging the digital divide and providing broadband for all; managing challenges resulting from ICT development; and improving and adapting to the changing ICT environment.
The Broadband Commission for Sustainable Development, an ITU-UNESCO partnership, identifies ways to increase the prominence of broadband on the international policy agenda and expand broadband access to help realize the SDGs. The Commission establishes targets on broadband policy, affordability, uptake, and gender equality for countries to ensure their populations participate in emerging knowledge societies. An ITU statement presented to the HLPF calls for prioritizing the deployment of broadband infrastructure in strategies towards achieving the SDGs and outlines ways that broadband can advance sustainable development, including by: addressing basic needs such as healthcare and food production; lifting people out of poverty through e-commerce opportunities and job growth; monitoring climate change; and bridging the gender digital divide.
The Global Infrastructure Connectivity Alliance (GICA), launched by the Group of 20 (G20) in July 2016 and hosted by the World Bank, enhances cooperation and synergies of global infrastructure and trade facilitation programmes seeking to improve connectivity within, between and among countries. The Alliance covers transport, energy, ICT, water, and trade, and aims to advance progress on SDG target 9.1 on resilient infrastructure. Policymakers and other stakeholders are prioritizing connectivity, as it can lead to increased productivity, improved service efficiency, greater spillover benefits of investments, and growth in trade.
The Global Innovation Index (GII), a tool developed by WIPO, ranks innovation performance of approximately 140 countries and economies based on 80 indicators related to political environment, education spending, patent applications, infrastructure, and business sophistication, among others. The 10th edition of the ‘Global Innovation Index (GII): Innovation feeding the World’ focuses on innovation in agriculture and food systems. According to a WIPO press release, the Index contends that innovation is critical for boosting economies and ensuring adequate food resources, although more investment is required. However, the Index also identifies a gap in innovative capacity between developed and developing countries and slow growth rates for R&D activities, both at the government and corporate levels. According to the GII: Switzerland, Sweden, the Netherlands, the US, and the UK are the most innovative countries; India, Kenya and Viet Nam outperform other developing countries; innovation opportunities in Latin America exist primarily in Chile, Mexico, Brazil, and Argentina; and Indonesia, the Philippines and Viet Nam are the ‘new Asian tigers,’ in part due to their high rank in education, productivity growth and high-tech exports.

These partnerships and tools are indicative of the importance that organizations and governments are placing on, inter alia, innovation and digital connectivity, and on advancing the SDGs, particularly SDG 9. In addition, such partnerships are critical to ensure that the SDGs are implemented in all parts of the globe, especially in more vulnerable regional and countries, such as Africa and the LDCs.

Recommendations

The Thematic Review presents a number of recommendations, including:

investing in ICT connectivity and extending broadband service to enable countries to fully benefit from the digital revolution;
implementing measures, such as discouraging heavy or special taxes on ICT equipment and services, encouraging R&D, enhancing technology security and privacy, and improving e-literacy;
developing indicators to reflect affordability, inclusiveness and quality of Internet access, and level of Internet use;
strengthening the capacity of national statistical systems to increase data availability and quality to plan, monitor and evaluate ICT for SDG policies;
utilizing innovative financing approaches that channel public resources into local economies to finance SMEs and build resilient infrastructure;
developing financing instruments that empower women economically; and
promoting collaboration among stakeholders to reduce technology gaps.

The Review further emphasizes that infrastructure investment in priority sectors (energy, water and sanitation, agriculture, transport, and ICTs) can expand market activity, enable access to new markets, and create job opportunities for women and youth in the formal and informal sectors. The Review also explains how the HLPF can: raise awareness on the need for increased international cooperation in STI; and catalyze efforts of UN entities and international finance institutions (IFIs) to raise public and private resources to achieve industry-related SDGs.

Conclusion

While SDG 9 implementation is progressing in many areas, more resources and capacity are needed in developing countries, especially LDCs and African countries, where often industrialization rates continue to lag and the benefits of the digital revolution remain elusive. The HLPF will further elaborate on areas where more progress can be made, as well as on: policy coherence among development, infrastructure, industrialization and STI; integrated national policy approaches; and the identification of gaps and successes. The hope is that experiences shared at the HLPF, including national experiences with adopting advanced technologies and infrastructures, and the role of international collaboration in this regard, will help advance SDG 9 and related Goals and targets, motivate increased public and private sector investment, and inspire more South-South cooperation as well. As STI Forum Co-Chair Macharia Kamau, Kenya, noted: “the fourth industrial revolution”―the cyber revolution―is upon us and we have no choice but to jump on board.” The HLPF’s review of SDG 9, scheduled for 13 July, will offer an opportunity to review the extent to which countries have joined a revolution to build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.

This policy brief is part of a special series of background policy briefs developed by the SDG Knowledge Hub in preparation for the 2017 session of the HLPF. Other policy briefs focus on of SDG 1 (no poverty), 2 (zero hunger), 3 (good health and well-being), SDG 5 (gender equality), 14 (life below water) and SDG 17 (partnerships for the Goals).

This policy brief draws on insights from Pamela Chasek, Ana-Maria Lebada, Faye Leone, and Catherine Wahlén.