Global Manufacturing Competitiveness Index
India ranks no. 2 in the 2010 Global Manufacturing Competitiveness IndexDOWNLOAD
New Delhi, June 24, 2010: A report issued today indicates that access to talented workers capable of supporting innovation is the key factor driving global competitiveness at manufacturing companies - well ahead of ‘classic’ factors typically associated with competitive manufacturing, such as labor, materials and energy.
These are the findings of the 2010 Global Manufacturing Competitiveness Index, a research report from Deloitte’s Global Manufacturing Industry group and the U.S. Council on Competitiveness. 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. It identifies what manufacturers view as important drivers of competition and what governments can do to improve overall manufacturing competitiveness.
“At its broadest level, the study confirms that the global competitive landscape for manufacturing is undergoing a transformational shift that will reshape the drivers of economic growth, high-value job creation, national prosperity, and national security,” according to Deborah L. Wince-Smith, president and chief executive officer of the U.S. Council on Competitiveness.
A key finding of the report was that talent-driven innovation ranked the most significant driver of competiveness in most markets. While the top three drivers - talent-driven innovation, cost of labor and materials, energy cost and policies - remain relatively stable across all geographic regions, some drivers showed a difference in ranking . Asian executives ranked government investment in manufacturing and innovation much higher than their counterparts in other countries.
“A strong manufacturing sector is a crucial component of a country’s intellectual capital, innovation capacity, and economic prosperity. In today’s environment, manufacturing competitiveness is driven by an empowered talent base, especially as manufacturers around the world integrate technology platforms and interfaces into their products,” said James Quigley, CEO, Deloitte Touche Tohmatsu. “From the Americas to Europe and from Asia, to Africa, understanding the public policy and market forces that shape the manufacturing landscape is essential to winning in the global economy.”
Newcomer economies to gain ground
The report also identified the emergence of a new group of leaders in the manufacturing competitiveness index over the next five years. Asian giants like China, India and the Republic of Korea are projected to dominate the index in five years, as they do now. Other countries to watch out for are Mexico, Poland and Thailand - countries not always considered alongside longer-standing, up-and-comers like Brazil and Russia.
India has been ranked as number 2 in terms of current competitiveness according to the report ahead of dominant manufacturing super powers of the late 20th century - the United States, Japan, and Germany - which are expected to become less competitive in five years. Other Western European nations will be similarly challenged, especially the Czech Republic, the Netherlands, Switzerland, the United Kingdom, Ireland, Italy, and Belgium - a finding made more dramatic by the continuing upheaval of the Euro.
“India is now well positioned to become an active participant in the entire value chain. The presence of strong foundation in R & D along with the fact that India is now viewed as a place where product development can be done, not just for the local market, but for the international market as well, are the driving forces behind India’s strong position” says Mr. Kumar Kandaswami, Manufacturing Industry Leader for Deloitte in India.
The report’s research-team leader and co-author, Craig Giffi, who serves as vice chairman and national industry leader for consumer and industrial products at Deloitte LLP, in the United States, went on to explain that the ‘epicenter’ for manufacturing continues to shift to emerging markets - Asia, in particular. “What had been the world order in the second half of the late 20th century, is giving rise to new manufacturing paradigms. But even with the rise of China, India, and Korea and the overall competitive repositioning of nations, the United States, Germany, and Japan are still formidable and very competitive.”
However, the study also shows the United States slipping in rank from fourth to fifth by 2015, the highest ranking country to show a decline - while China and India remain in first and second place. “This finding deserves careful consideration as the U.S. evaluates its global competitiveness position,” cautions Giffi.
Competing seen as easiest in Asia, tougher in United States and Europe
The report 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 United States, with 70 percent of them citing government support of science, technology, and innovation as advantageous. The European respondents identified public policy support for infrastructure development (46.1 percent), science and technology and innovation (43.4 percent), and intellectual property protection (42.1 percent) as their advantage. Respondents in the Unites States cited intellectual property policies (75.5 percent) and technology policies (61.3 percent) as their competitive edge.
Respondents in each region also identified differing policies that inhibit competitiveness. In China, these included immigration policies (32.1 percent) and healthcare (27.7 percent); in the United States, government intervention and ownership in companies (59.2 percent), corporate tax policies (53.1 percent), healthcare policies (51 percent), product liability laws (42.9 percent) and immigration policies (32.7 percent); and in Europe labor laws and regulations (42.1 percent), environment policies (36.8 percent) and energy policies (31.6 percent).
To download the 2010 Global Manufacturing Competitiveness Index, please visit www.deloitte.com/globalcompetitiveness.
About the Study
To learn how manufacturing chief executive officers and other senior leaders view their industry’s competitiveness around the world, Deloitte’s Global Manufacturing Industry group and The U.S. Council on Competitiveness undertook a multi-year Global Competitiveness in Manufacturing initiative. The initiative was based, in part, on the responses of more than 400 senior manufacturing executives worldwide to a wide-ranging survey discussing the current business environment and global competitiveness in the manufacturing sector. The study also draws on select interviews with key manufacturing players as well as unique insights provided by the professionals at Deloitte, its member firms, the U.S. Council on Competitiveness, and Clemson University. For more information concerning the specifics of this study and its participants, please consult the study’s appendix by downloading the full report at www.deloitte.com/globalcompetitiveness.
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About the U.S. Council on Competitiveness
The Council on Competitiveness is a leadership organization comprised of chief executives officers, university presidents and labor leaders committed to ensuring that the United States remains the world leader. The Council has one goal: to strengthen America’s competitive advantage by acting as a catalyst for innovative public policy solutions. For more information, please visit
As used in this press release, ‘Deloitte’ means Deloitte Touch Tohmatsu member firms
This press release has been given by Deloitte Touche Tohmatsu India Private Limited (DTTIPL), a Company established under the Indian Companies Act 1956, as amended.
DTTIPL is a member firm of Deloitte Touche Tohmatsu, a Swiss Verein, whose member firms are legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms