Inclusive and Sustainable Industrial Development Working Paper 2/2017 This working paper is divided into four parts. The first section explores the different stages of development and the different skill patterns required to link the process of structural change with skills development. It underlines that technical specialization increases when a shift towards sophisticated industries takes place. Furthermore, important considerations policymakers need to take when designing skills policies as well as youth and the informal sector are addressed. The second section provides insights on a range of skills policy instruments for low- and middle-income countries. The third section highlights some of the main skills policy instruments used by policymakers and describes the experiences of low- and middle income countries with regard to implementation of such instruments. The conclusion summarizes the key findings and gives recommendations for policymakers in the implementation of skills policies in low- and middle income countries.