In his inauguration speech, Morales promised to launch state-run paper, cement, dairy and drug companies and develop iron and lithium industries to help Bolivia export value-added products instead of raw materials.
Call for investors
Bolivia has huge deposits of lithium but does not exploit the metal.
"We need a lot of money to industrialise lithium ... we're ready to negotiate [with foreign investors] to guarantee investments," Morales said.
Foreign investors became wary after the president's energy industry nationalisations in 2006, which increased taxes on foreign companies.
Morales said Bolivia needed "partners but not patrons."
Bolivia is South America's top exporter of natural gas, but Morales has failed to attract investment to increase output and corruption has hampered efforts by the state-run energy company to develop projects to produce natural-gas derivatives.
After nationalising energy, mining and telecommunication companies the Bolivian state controls 28 per cent of the economy, increased from about 8 per cent before Morales became president.
The government is targeting 40 per cent state control over the economy, mainly by launching more state companies.
His inauguration was attended by several South American presidents, including Hugo Chavez, Venezuela's president, and Rafael Correa, Ecuador's leader.
Bolivian Indians make up around 60 per cent of the population and have long complained of discrimination by a mixed-raced minority that had a stronghold on politics until Morales first became president in January 2006.