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Deloitte 2013 Global Manufacturing Competitiveness Index: There are opportunities for an outwardly-focused manufacturing sector


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21 November  2012: Areas that will define Australia’s manufacturing competitiveness over the next five years will include innovation, skills, the economic, trade and finance environment, the approach to clean energy and digital technologies, according to Deloitte Manufacturing Partner, Damon Cantwell.

These perspectives are made in the context of the recent benchmarking Index from Deloitte and the U.S Council on Competitiveness, the 2013 Global Manufacturing Competitiveness Index, which highlights that globally Australia ranks at number 16 in terms of current competitiveness (down from 15th in 2010) and is currently expected to rank 17th against other national economies in the next five years.

The Index, which includes over 550 survey responses from CEOs around the world, details expected changes in global manufacturing centres over the next five years.  

“This Index provides Australian manufacturers, policymakers, academics and business leaders with an opportunity to increase dialogue and better understand the current forces driving manufacturing competitiveness in today’s volatile economic climate,” said Mr Cantwell.

How can Australian manufacturers remain competitive?

“In order for Australia to move up the competitive index over the next five years, the efficiency of our innovation system and better utilising our highly-skilled workforce will be seen as the main differentiating factors for our success in manufacturing competitiveness,” said Mr Cantwell.

“This would include building more effective bridges between some of the world-class research activity being undertaken at our universities, the CSIRO and CRCs on the one side, and the current and emerging needs of manufacturers on the other.”

Overwhelmingly, the Index highlights that the drivers of manufacturing success in coming years do include competitive advantages for Australia.  This is particularly so in the areas of integration with the Asian region (which is earmarked for impressive growth), and leveraging off our very stable economic, financial and trading systems.

“The Index references the impact of on-going global uncertainty, particularly in Europe, and shows that global manufacturers are increasingly looking for stability in regard to their location investment decisions and global supply chains,” said Mr Cantwell.

The 2013 Index predicts that the global epicentre of manufacturing will continue to be in the Asia-Pacific region with 6 out of 10 Asian countries ranking within the top 10 in terms of current competitiveness.   

“The Asia Pacific region continues to present opportunities for our manufacturers. Australia needs to put itself forward as a viable destination for specific types of manufacturing investment that will be sustainable in the long term. This includes high-value add activity and niche manufacturing,” said Mr Cantwell.

“The Index also identified that the digital revolution is impacting manufacturing, so our NBN could play to a more competitive manufacturing sector with the issues defining competitiveness in manufacturing having an increasingly digital flavour,” said Mr Cantwell.

Table 1: 2013 Country manufacturing competitiveness index ranking - Please refer to the downloadable version of this media release to view the Table content

The above table shows that the three most significant manufacturing powers- the United States of America, Germany and Japan remain in the top ten most competitive nations today but are expected to decline in their overall competitiveness rankings over the next five years.  

The index also highlights that many facets of the global economy are nearly borderless and resources for production such as knowledge, technology, creativity and capital are highly mobile.

“For Australian manufacturers, this means picking ‘winning areas’ which will focus on areas of strategic importance at the upper end of the value chain.  The extent to which public policy and programs support this strategic direction will also be a potential differentiator for Australia’s manufacturing sector,” concluded Mr Cantwell.

Highlights from the 2013 Global Manufacturing Competitiveness Index:

  1. Profile of respondents by region and revenue size

North America   40%
Asia 29%
Europe 20%
Australia 6%
South America 5%

  1. Five years from now, emerging economy nations surge to occupy the top three spots in the survey, with China retaining the top spot and India and Brazil moving to claim second and third rankings.
  2. Brazil’s jump from eighth to third is the largest jump expected over the next five years.
  3. Over the next five years the shift to Asia continues, with Asia having ten of the top fifteen most competitive nations in 2017. This includes Indonesia moving from 17th place to 11th.
  4. Innovation is deemed the most critical driver of a nation’s competitiveness among the ten major categories of drivers.

To download the 2013 Global Manufacturing Competitiveness Index, please visit www.deloitte.com/globalcompetitiveness

NB: See our media releases and research at www.deloitte.com.au

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Contacts

Name:
Jane Kneebone
Company:
Deloitte Australia
Job Title:
Corporate Affairs & Communications
Phone:
Tel: +61 3 9671 7389, Mobile: +61 4 1614 8845
Email
jakneebone@deloitte.com.au
Name:
Damon Cantwell
Company:
Deloitte Australia
Job Title:
Deloitte Manufacturing Partner
Phone:
Tel : +61 3 9671 7543
Email
dacantwell@deloitte.com.au

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