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Deloitte publishes 2013 Global Manufacturing Competitiveness Index

CEOs see emerging nations surge as U.S., Germany and Japan face changing game

16 November 2012

  • China is ranked as the most competitive manufacturing nation in the world both today, and five years from now
  • The UK is predicted to drop from 15th place today, to 19th place in five years’ time
  • Talent continues to be key driver of manufacturing competitiveness

Over the next five years, 20th-century manufacturing stalwarts like the United States, Germany and Japan will be challenged to maintain their competitive edge to emerging nations such as India and Brazil, according to the 2013 Global Manufacturing Competitiveness Index report from Deloitte Touche Tohmatsu Limited’s (DTTL) Global Manufacturing Industry group and the U.S. Council on Competitiveness.

The report confirms that the landscape for competitive manufacturing is in the midst of a massive power shift – based on an in-depth analysis of survey responses from more than 550 chief executive officers (CEOs) and senior leaders at manufacturing companies around the world. This shift will clearly impact the UK, as it is predicted to drop from the 15th most competitive nation today, to 19th position in five years’ time. This slide in competitiveness holds true for several other European nations, including France, Italy, Belgium, the Netherlands, Portugal, Poland and the Czech Republic, which are all expected to experience a dramatic decrease in their ability to compete.

The 2013 Global Manufacturing Competitiveness Index once again ranks China as the most competitive manufacturing nation in the world both today, and five years from now. Germany and the United States round out the top three competitive manufacturing nations, but, according to the survey, both fall five years from now, with Germany ranking fourth and the United States ranking fifth, only slightly ahead of the Republic of Korea. The two other developed nations currently in the top 10 are also expected to be less competitive in five years: Canada slides from seventh to eighth place and Japan drops out of the top 10 entirely, falling to 12th place.

“America and Europe have continued to watch emerging markets mature and become formidable competitors over the past decade,” said David Raistrick, UK Manufacturing Leader at Deloitte. “While the UK is currently still performing very well against its global competitors, it will struggle to keep up the rapid pace of innovation, development, growth and investment expected from emerging countries such as Brazil and India.”

“A key barrier for the UK specifically is around energy cost and policies. If the UK is to improve its competitiveness globally, we need to invest not only in a skilled labour force, but also need to ensure the UK has a credible energy policy. This will inevitably mean nuclear must be a real option if we are to grow our energy generating capacity sufficiently to allow the manufacturing industry to grow over the next few decades. Looking wider, Europe’s competitiveness advantages include intellectual property protection laws, but face hindrances when it comes to Government financial investment, immigration policies and labour policies.”

In five years key emerging nations are expected to vault forward in the Index: Brazil jumps from its current eight place slot to third place and India jumps from fourth to second place. China remains firmly in first place. While the Americas region will continue to show significant manufacturing prowess – with the United States, Brazil, Canada and Mexico all in the top 15 most competitive nations five years from now – many advantages are tilting toward Asia, which will have 10 of the top 15 most competitive nations within the decade.

“Frontier markets in Asia such as Vietnam and Indonesia are on the rise,” says Raistrick. The global CEO survey results echo the view that while China and India are still prominent in discussions, manufacturers are turning their focus to these frontier markets for growth to capture both the growing local consumer demand and to serve as strategic manufacturing hubs in the global value chain.”

Deborah L. Wince-Smith, president and CEO of the U.S. Council on Competitiveness, views the perceived decline of America and developed nations as an alarming trend requiring immediate action.

“We need to better understand the highly complex forces driving the future of manufacturing and many of the structural changes reshaping the global economy. Emerging nations are growing fast and strong. Wise policies and practices could unleash American strengths, turbo-charge our manufacturing engines, and raise technology commercialization to new heights, driving U.S. economic growth and job creation,” she said.

Talent leads the way

The report found that access to talented workers is the top indicator of a country’s competitiveness – followed by a country’s trade, financial and tax system, and then the cost of labour and materials.

“Nothing was more important to CEOs than the quality, availability and productivity of a nation’s workforce to help them drive their innovation agendas,” said Raistrick. “Enhancing and growing an effective talent base remains core to competitiveness among the traditional manufacturing leaders – and increasingly among emerging market challengers as well. Globally, this is going to be a tough challenge, considering that it’s one of the industries with the largest skills gap.”

Raistrick concludes: “Manufacturing still matters a great deal for the economic prosperity of 20th century powerhouses – and these nations continue to have enough going for them to stay in the game and even thrive. In particular, the UK has intrinsic strengths to build on. We should not forget that the UK is an open, trading economy with a flexible labour market and an attractive investment location for global companies as we have seen in recent times. English remains the predominant language of business throughout the world and the UK’s institutions, such as its legal system, are respected around the world. The UK has a world-class research base with more top-ranking universities than any country except the U.S.”

“All of this leads one to believe that the UK has the potential to remain in its current position on the Index, or even move up a few ranks, if these and other strengths are harnessed. It will mean more successful British companies can compete in global markets, develop innovative products and services, and so create new jobs and rising prosperity.”

The report reveals several schisms in competitiveness between established manufacturing players and their emerging counterparts, most notably:

  • Traditional manufacturing stalwarts are perceived to have an advantage with respect to talent-driven innovation. More than 85 percent of global executives “strongly agree” or “agree” that the availability of quality skilled talent needed for advanced manufacturing in the United States, Germany and Japan makes those nations highly competitive – while just 58 percent say the same about China and 40 percent say it about India.
  • Established manufacturing nations scored far better than emerging manufacturing nations when it came to local economic, trade, financial and tax systems. More than seven in 10 global business leaders “strongly agree” or “agree” that Germany and the United States have an extreme competitiveness advantage based on this criterion, but only 43 percent say the same about India.
  • Superior healthcare systems will likely give established manufacturing nations a distinct advantage over emerging players, thanks to their access to quality care and regulatory policies for public health. More than seven in 10 business leaders believe that the healthcare systems in the United States, Germany and Japan make them extremely competitive, but no more than three in 10 say that about China, India and Brazil.
  • When looking at labor costs and availability, stalwart manufacturing nations find themselves squarely on the defensive. Almost nine in 10 global executive believe China and India are extremely competitive with respect to the local cost and availability of labor, but fewer than four in 10 believe the same about the United States, Germany and Japan.
  • The newest of the emerging superpowers have a long way to go when it comes to supplier networks. Fewer than five in 10 executives “strongly agree” or “agree” that India and Brazil are extremely competitive relative to their supply networks, compared to the eight in 10 or more who say the same thing about the United States, Germany and Japan.
  • Emerging manufacturing nations will likely struggle to be competitive in regards to their legal systems. Fewer than four in 10 global business leaders “strongly agree” or “agree” that China, India and Brazil are extremely competitive relative to their legal systems, compared to the more than eight in 10 who feel that way about the United States, Germany and Japan.
  • Newer manufacturing players face an uphill battle when it comes to physical infrastructure competitiveness. Fewer than a quarter of business executives “strongly agree” or “agree” that India’s infrastructure makes it extremely competitive, but almost nine in 10 say the United States, Germany and Japan have a strong infrastructure advantage.

To download the 2013 Global Manufacturing Competitiveness Index report, please visit


Notes to editors:

About the Study
The 2013 Global Manufacturing Competitiveness Index is an initiative led by The U.S. Council on Competitiveness and Deloitte Touche Tohmatsu Limited designed to determine how CEOs view the competitiveness of the manufacturing industry in different countries around the world. A global CEO survey, which generated responses from 552 CEOs and senior executives, offers perspectives on the most important factors that drive manufacturing industry competitiveness. The global survey results also helped to create a unique Global Manufacturing Competitiveness Index ranking the relative manufacturing industry competiveness of countries and reflect how executives perceive this may change over the next five years. The in-depth study seeks to define excellence in manufacturing and draw out the implications for manufacturers in terms of the competencies required to develop and sustain an edge in a new competitive landscape. Participants were also asked to provide their views of the global economic conditions and government actions that can bolster competitiveness in the manufacturing industry. To learn more, visit

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.


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