SDG 9 – Industry, Innovation and Infrastructure

The economic focus of many developing countries and emerging economies continues to be on agriculture and tourism – even if attention to the latter is not quite as strong. Until now, industry has played a lesser role. Agenda 2030 aims to change this. At KfW Group, DEG finances, advises and supports private companies that wish to invest in the production sector in developing countries and emerging economies.

KfW Development Bank’s role is to work with partner countries to create an improved and economically stable framework for the private sector. Although small and medium-sized enterprises (SMEs) in developing countries are responsible for over 60% of newly created jobs, a large proportion of them do not have access to financial services. And the coronavirus pandemic has exacerbated this situation considerably. This is where KfW comes in, by developing need-based financial systems. This also includes corporate financing via funds and SME promotion as part of coronavirus emergency aid. In Central America, for example, it offers loans, seed capital, loan guarantees and advice via the DINAMICA programme on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ). However, KfW also promotes the private sector by supporting vocational training measures that are geared towards the needs of local companies and produce qualified specialists, such as in the Western Balkans.

While innovation is not synonymous with digitalisation, it is inevitable that both are intertwined as digitalisation creates countless innovations. There are many opportunities for developing countries to catch up on development backlogs through leaps in technology (“leap-frogging”). However, there is still often a lack of the necessary infrastructure, expertise or simply financial means to use digital applications across the board.

To bridge this gap, KfW is involved in many projects for innovative technologies and sustained, risk-aware digitalisation. In Malawi, for example, it is investing in the digital education infrastructure with the "Unlocking Talent" programme. Primary school children learn to read, write and calculate using tablets. In Peru, KfW is supporting the introduction of a digitalised land register to ensure a long-term and dependable water supply. And in Laos, it supports a digital remote sensing system to prevent illegal logging.

Infrastructure includes all state and private facilities that are necessary for sufficient public services. These span from roads and sewers to schools and hospitals, to digital infrastructure that not only includes servers and computers but also and primarily tends to the network itself. In most developing countries there is still a lack of adequate infrastructure – and the quality of existing infrastructure is often insufficient. Water pipes are often defective; drinking water seeps away unused. Schools and other public buildings are poorly insulated, which means that an unnecessary amount of energy is required for heating.

KfW is therefore promoting the expansion and renewal of resilient and sustainable infrastructure. This includes, for example, the expansion of rural roads, as well as modern, climate-friendly mobility in cities in order to connect people and goods and to enable the population to access markets and educational facilities at all times. The expansion of digital infrastructure and the implementation of IT solutions can also help to improve the living and economic conditions of poorer countries. Rwanda, for example, digitalises municipal administrative processes with a monitoring, evaluation and information system ( MEIS) supported by KfW. This not only allows social benefits to be processed more transparently and efficiently for the poorest members of the population, it also allows for greater citizen participation in decisions on investments in local infrastructure, which is the project’s stated aim.