Emerging economies face manufacturing challenge from new group: Deolitte

Asian giants like China, India, and South Korea will continue to dominate the global manufactruring business in the next five years, even as the United States, Japan, and Germany are expected to become less competitive over the period, a report by Deloitte's Global Manufacturing Industry group and the US Council on Competitiveness said in a report.

The report, however, said the emerging economies would also face competition from a new group of leaders in the manufacturing competitive index over the next five years. These include Mexico, Poland, and Thailand as also countries like Brazil and Russia.

Western European nations will also face similar challenge, especially Czech Republic, the Netherlands, Switzerland, Ireland, Italy and Belgium.

"China and India have been emerging as global leaders in manufacturing for a number of years now, and this survey highlights the increasing dominance that these two major economies will continue to have over the remainder of this decade," Wayne Harvey, senior partner of Deloitte, said.

According to the report, access to talented workers capable of supporting innovation rather than the 'classical' factors such as labour, materials, and energy, is the key factor driving global manufacturing competitiveness.

The report also identified a clear geographical divergence in the perception of public policy support for competitiveness. Most respondents from China think that their government makes competitiveness easy compared to respondents in Europe and the US, with 70 per cent of them citing government support of science, technology, and innovation as advantageous.

The Global Manufacturing Competitiveness Index seeks to identify the greatest source of competitive advantage for manufacturers today and expectations for the future.

The report is based on the responses of more than 400 chief executive officers and senior manufacturing executives worldwide to a survey conducted in late 2009 and early 2010. It also draws on select interviews with key manufacturing decision makers.