Industrial development is crucial for job creation and poverty reduction in the low- and middle- income countries (LMICs). It can also improve environmental sustainability. However, most LMICs struggle to develop their industries. The critical challenge for policymakers in LMICs is upgrading their micro, small, and medium enterprises (MSMEs) while considering their diversity. Potentially growing firms face different constraints than stagnant firms that are not necessarily willing to grow. Therefore, there is no one-size-fits-all MSME policy. This brief recommends that the G20 support industrial development in LMICs by providing management training to their MSMEs in industrial clusters. Management training can help screen growing firms and boost their productivity. Further, it will help stagnant firms increase their income incrementally and adopt more stable and environment-friendly business practices. Industrial clusters are the best injection point of such training as the knowledge can spill over to other firms in the same cluster.
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