New Industrial Landscape: Implications for Industrial Policy and Japanese Industrial Development Cooperation

This chapter presents the new industrial landscape by discussing contemporary mega-trends such as globalization, digitalization, and environmental response, and draws implications for developing countries and Japanese industrial development cooperation. The shape and scope of industrialization is rapidly changing with the expansion of global value chains (GVCs), digital transformation, and the development of Industry 4.0. There is also a drive toward realizing inclusive and sustainable industrial development as embraced in the Sustainable Development Goals (SDGs). The COVID-19 crisis confirms the important role that industry plays in enhancing economic and social resilience and ‘building back better’ recovery. These mega-trends offer opportunities for developing countries to accelerate industrialization, as well as raising new challenges. The chapter discusses industrialization challenges in today’s context and argues that Japan also needs to upgrade its capacity for industrial support by adding new developmental values and instruments as well as promoting co-creation with developing countries on a more equal basis—learning together, solving problems together, and facilitating mutual knowledge accumulation. As a benchmark case study, the chapter features the automotive industry, which encompasses all the aspects of the four mega-trends as well as dynamic and rapid changes, opportunities and challenges, and rich experience of Japan’s industrial cooperation.