Given Laos’ economic and social development, this memorandum aims to analyze the industrial development objectives of Laos and comes up with policy recommendations that help to upgrade the industrial structure of Laos’ product space. Based on the current economic and geographic situation, Laos enjoys certain comparative advantages in high-end agricultural products, garment and handcraft, and wood and forest products. While these industries can serve as the starting point of Laos’ economic development, special emphasis should be put on the dynamic development of the industry profile. In order to develop a high-end modernized industry structure, Laos should strive to develop the backward and forward linkages of the industry. A few policy recommendations with regard to the industry modernization are offered.