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Physical Infrastructure

2013 Global Manufacturing Competitiveness Index


Executives responding to the 2013 GMCI survey ranked physical infrastructure as the sixth most important driver of manufacturing competitiveness, noting specifically the cost and process efficiencies, as well as productivity improvements that directly result from access to quality infrastructure. This driver includes support for the basic logistics involved in the movement of physical goods, as well as the efficient movement of information and energy through technology-based infrastructure investments in smart-grid, broadband and other networks.

In addition to reducing costs and improving efficiencies to conduct business, supplemental research reveals that ongoing investments in infrastructure drive innovation, and in turn, boost job creation, fostering a growth cycle within a nation. Specifically, a recent estimate by the U.S. Congressional Budget Office suggests that every dollar of infrastructure spending generates an additional 60 cents in economic activity (for a total increase to GDP of $1.60).

Executives participating in the survey felt developed nations — Germany, Japan and the U.S. — offer a competitive advantage over the three emerging economies — China, Brazil, and India. However, as the infrastructure in developed nations ages, and as emerging nations ramp up investments in not just traditional infrastructure, (e.g., roads, ports, and bridges), but also in advanced-technology based infrastructure (e.g., smart electricity grids, national security technologies, high speed rail, etc.), there is potential for significant disruption in current country rankings in the near future.

When evaluating the factors that create a competitive advantage with respect to infrastructure, executives participating in the 2013 GMCI survey consistently noted the strength of a nation’s electricity, Information Technology (IT) and telecom systems as the most important infrastructure driver in measuring a country’s manufacturing competitiveness. 

Strength in technology-based infrastructure bodes well for emerging economies like China, India and Brazil, which are making significant infrastructure investments in areas that can not only support current technologies but also provide much needed capacity for future innovations and mass adoption of new technologies. One specific example is China’s government focus on electric vehicles and the investments to provide citizens with the requisite support infrastructure to ensure their success (e.g., smart grids, convenient access to charging stations for customers, etc.).  Over the long-term, these and similar infrastructure investments will not only improve physical infrastructure, but will likely also serve as catalysts for additional investments in Research and Development (R&D) and other areas that positively impact a nation’s overall competitiveness.

2013 Global Manufacturing Competitiveness Index

Main page: Return to the 2013 Index overview
Continue reading: Country analyses, appendix A

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