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Top 10 Nations Ranked by the 2013 Index

Supplemental country analysis


Manufacturing highlights
  • China is the largest exporter and the second largest importer in the world
  • China became the largest manufacturing country in the world, overtaking the U.S. in 2010
  • China's exports are primarily in the toys, apparel and electrical and electronics industries. China is the world's largest manufacturer of toy products, with a 70 percent share
Advantages to manufacturers
  • Favorable policy actions
  • Growing middle class
  • Increasing R&D
  • Advanced electronics manufacturing
  • Robust raw material supply base
  • Physical infrastructure
  • Innovation
  • Tax burden
  • Lower productivity
  • Regulatory inefficiency
Areas to watch out
  • Investment in strategic industries
  • Slowing domestic growth
  • Greater emphasis on energy and environment
  • Improving education
  • Rising labor costs
Read the full country analyses in Appendix A of the report.
Manufacturing highlights
  • With only about 1.2 percent of the world population, Germany is the world's fourth largest producer and the largest exporter of automobiles (cars and commercial vehicles)
  • Germany is the second largest manufacturing exporter after China, with manufacturing exports growing 2.7 times between 2000 and 2011
  • Germany(s small and medium sized enterprises (SMEs), called the Mittlestand, include three million companies and employ around 70 percent of the country's workforce
Advantages to manufacturers
  • Dominance in manufacturing "mechatronics"
  • Automotive capabilities
  • Innovation capability
  • Growth of SMEs (Mittlestand) boosted manufacturing
  • Skilled labor
  • High quality infrastructure
  • Lack of venture capital
  • High labor costs
  • Vulnerability of German banks to the Euro-zone crisis
Areas to watch out
  • Domestic demand-led recovery
  • Encouragement for alternative energy sector
  • Intensification of the Euro-zone crisis
Read the full country analyses in Appendix A of the report.
United States of America
Manufacturing highlights
  • U.S. remains the most heavily invested-into country in the world with FDI stock inflow being $3.5 trillion in 2011
  • Second largest manufacturer of automobiles (cars and commercial vehicles) in 2011
  • U.S. has the sixth largest proven natural gas reserves. Low cost shale gas availability gives U.S. manufacturers a competitive edge in the global markets
  • U.S. share of the world's total GDP (PPP) is likely to fall to 18.4 percent by 2015 due to China's rapid economic growth
  • Manufacturing employment in the U.S. declined from 17.6 million jobs in 1998 to just 11.6 million jobs at the end of 2010
  • Largest producer of ethanol biofuel. Along with Brazil, it accounted for 87 percent of ethanol production in 2011
Advantages to manufacturers
  • Technological prowess and size
  • Research support for national laboratories and universities
  • High productivity
  • Policy actions
  • High-cost labor
  • High corporate tax rates
  • Slowing growth
Areas to watch out
  • Policy uncertainty
  • Shale gas availability
  • Reshoring
Read the full country analyses in Appendix A of the report.
Manufacturing highlights
  • India posted a real GDP growth of 6.9 percent in 2011. The economy grew at a 5-year CAGR of 7.8 percent till 2011, which is among the highest among major emerging nations
  • India's manufacturing exports grew at a CAGR of 17.1 percent between 2006 and 2011
  • India's largest manufacturing exports are textile goods, engineering goods and chemicals
  • India is the sixth largest manufacturer of automobiles (cars and commercial vehicles) in the world in 2011
Advantages to manufacturers
  • Skilled, low-cost labor force
  • Plans huge investments in infrastructure
  • High economic growth
  • Ambitious national manufacturing policy
  • Poor infrastructure and government regulations
  • Increased inflation, higher interest rates, and lower growth
Areas to watch out
  • Labor reforms
  • Government policies
Read the full country analyses in Appendix A of the report.
South Korea
Manufacturing highlights
  • South Korea leads globally in the manufacturing of LCD (Liquid Crystal Displays), memory chips and smart phones
  • It is the world's largest shipbuilder and 5th largest globally in automobile manufacturing
  • Its most important exports are finished products such electronics, semiconductors, LCD panels, mobile phones, computers accessories, television sets and motor vehicles
Advantages to manufacturers
  • Competitive costs and better quality
  • Growth in free trade agreements
  • Strong innovation
  • Favorable industrial policy
  • Well-educated workforce
  • Bureaucratic complexities
  • Slowing global economy impacting South Korea's growth
Areas to watch out
  • Reducing interest rates to boost growth
  • Investment opportunities from development of green technologies and renewable energy
Read the full country analyses in Appendix A of the report.
Manufacturing highlights
  • Taiwan has a large electronics industry that has been the primary exporter and driver of the country's economy
  • Taiwan began as a manufacturing base for foreign semiconductor companies but has now evolved into a global development and manufacturing center
Advantages to manufacturers
  • Low tax burden
  • Educated workforce
  • Infrastructure
  • Strong ties with western economies
  • Taiwan free trade zone
  • High economic freedom
  • Manufacturing cluster
  • Intellectual property protection
  • No natural resources
Areas to watch out
  • Cross-strait relations
  • Strong relationship with China
  • Signing of new free trade agreements
Read the full country analyses in Appendix A of the report.
Manufacturing highlights
  • Canada has an established manufacturing industry and exports motor vehicles and parts, industrial machinery, aircraft, telecommunications equipment and electronics
  • Canadian industry relies heavily on resource-based manufacturing
  • Canada is one of the few developed countries that is a net energy exporter
Advantages to manufacturers
  • Efficient regulatory environment
  • High economic freedom
  • Strong support for exports
  • Support for industry
  • Abundant natural resources
  • Availability of skilled labor
  • Appreciation of Canadian dollar
Areas to watch out
  • Free trade agreements
  • Elimination of import duties and tariffs
  • Clean energy
Read the full country analyses in Appendix A of the report.
Manufacturing highlights
  • Brazil is a growing economy with footwear, autos, automotive parts and machinery as its major manufacturing exports
  • Brazil is the world's second largest producer of ethanol fuel and until 2010, it was the largest exporter
Advantages to manufacturers
  • Favorable policy actions — Brazil Major
  • Vast natural resource base
  • Low-skilled but high-cost labor
  • High taxation
  • Poor infrastructure
  • Brazilian real appreciation
Areas to watch out
  • Reforms to reduce "Brazil Cost"
  • Effectiveness of Bigger Brazil Industrial Plan
  • Investment in infrastucture
Read the full country analyses in Appendix A of the report.
Manufacturing highlights
  • Major manufacturer of electronics and chemicals, including pharmaceuticals
  • Manufacturing exports as a percent of merchandise exports stood at 68.1 percent in 2011
  • Electronics manufacturing nominal value-add to manufacturing is declining — 35.8 percent in 2005 to 29.2 percent in 2011. However, electronics was still the largest industry in manufacturing in 2011, followed by biomedical manufacturing at 22.4 percent
Advantages to manufacturers
  • Highly-educated workforces
  • Investment friendly climates
  • R&D incentivess
  • High-quality infrastructure and intellectual property protections
  • Transparency and government efficiencys
  • Favorable tax systems
  • Increasing business costs and inflation
  • High living costs
Areas to watch out
  • Focus on improving productivity and efficiency
  • Declining growth
Read the full country analyses in Appendix A of the report.
Manufacturing highlights
  • Japan is one of the largest economies in the world despite lacking any significant natural resources. Its manufacturing industry has been the primary driver during its period of rapid growth post the second world war
  • Japan's primary exports are consumer electronics, automobiles and semiconductors
  • Japan has traditionally been ahead of the rest of the world in automation and implementation of best practices in manufacturing operations
Advantages to manufacturers
  • Favorable policy actions
  • Incentives to locate facilities in Japan
  • Dominance in auto and electronics industries
  • High taxation
  • Rapidly ageing population
  • JPY appreciation
  • Few natural resources
Areas to watch out
  • Support for renewable energies
  • Restarting of nuclear energy facilities
  • Investment in infrastructure
Read the full country analyses in Appendix A of the report.


Key Drivers of Competitiveness

Talent-driven innovation Physical infrastructure
Economic, trade, financial, and tax systems Energy costs and policies
Cost and availability of labor and materials Local market attractiveness
Supplier network Healthcare systems
Legal and regulatory system Government investment in manufacturing and innovation

2013 Global Manufacturing Competitiveness Index

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