Shannan has formed a basic industrial structure. The prefecture has established such industries as electricity, mining, farm-implement and vehicle repairing, cement, metallurgy, printing, pharmaceuticals, food processing and the service trades. At the end of 1997, the prefecture had a total of nearly 200 enterprises, which achieved a combined 96.72 million yuan in industrial output value. But in 1959, total industrial output was only 1,000 yuan. There are now 79 small power stations at the county, to worship and village levels, generating 44.83 million KWh annually. The Yamzhog Yumco Water Pumping and Power Storage Station, the largest in Tibet, was established in Shannan. It is estimated that during the "Ninth Five -Year" Plan period its hydroelectric power installed capacity will increase to 33.600kilowatt, which will help realize the comprehensive electrification at the prefecture and county levels.

Light industry revolves mainly around the processing of agricultural and livestock products and pharmaceuticals. Manual operation has been gradually replaced by mechanization and semi-mechanization to form small-scale production. However, most textiles and leather processing are still done manually.

Shannan's ethnic handicrafts industries have a long history. According to legend, during the Tubo Kingdom, prior to the 6th century, handicraft products were used by the royal families and the nobility. Prior to 1959, most handicrafts were created by individuals and family workshops. These families were often also involved in processing. Most of their products were turned over as tax payments were in the form of corvee labor. Only a small amount of pulu (woolen fabric)and decorated aprons was sold abroad or to Tibetan areas in neighboring provinces. Some 90 percent of people in Chanang County are engaging in the production of pulu and aprons. Their products enjoy a good reputation around the region and in neighboring countries. Chanang County's Tsangyu Village of Jiglin Township has a long history of pottery manufacture and has long been a famous pottery base in Tibet. The products most in demand are jars, urns, pots and basins. They are of fine quality and loved by the Tibetans.

In Gyaidexiu Township, Gonggar County, known as "the home of aprons", traditional skills handed down from generation to generation have been continuously developed. Gyaidexiu aprons feature multiple varieties, beautiful designs and colors, and good quality. They sell well in all parts of Shannan and Lhasa, as well as in Sichuan and Qinghai provinces and in neighboring countries.

Stone pots, wooden bowls and bamboo articles made in Gyacha and Caona counties are well received. The best quality wooden bowls are made from huge knots in the branches of birch trees, from the roots of wild grapevines and the roots of azalea trees. They are hard, exquisitely produced and coated with lacquer but revealing the natural lines and shapes. Other bowls are inlaid with silver at the edge or bottom. Beautiful and durable, they are considered some of the finest examples of native Tibetan handicrafts.

In 1974, two sisters established the Nedong Carpet Mill. Their products have met with good markets in the United States and Japan. In 1994, the mill's output value topped 398,000 yuan. Tightly woven and beautifully designed, the carpets are both durable and attractive. They enjoy a good reputation. Tibetans can produce such daily necessities as Kadians (small carpets), Tibetan quilts, copperwares, silverware, milk pots, plows, saddles, Tibetan axes, sickles, and wooden, bamboo, willow and cane works. Varieties have been constantly increased and quality constantly raised. They have played a great role in improving daily life, fostering markets and developing the production of agriculture and animal husbandry.