Deloitte Global study: Manufacturing’s ongoing influence in driving global economies

In its comprehensive 2016 Global manufacturing competitiveness index (GMCI), Deloitte Touche Tohmatsu Limited (Deloitte Global) and the Council on Competitiveness (the Council) in the United States build upon the GMCI research, with prior studies published in 2010 and 2013. The results of the 2016 study clearly show the ongoing influence manufacturing has on driving global economies.

The study highlights include country rankings and shifting dynamics among global manufacturing nations; top drivers of global manufacturing competitiveness; impact of public policy; the role of advanced manufacturing technologies in transforming the industry’s future; the link between competitiveness drivers and country performance; and the rise of MITI-V (The “Mighty Five”) countries that dominate global manufacturing.

The GCMI study reaffirms the rapidly evolving manufacturing landscape that has dominated world order for the past 25 years. And now, with the full convergence between the digital and physical manufacturing worlds underway, we appear to be heading into a fourth industrial revolution.

As the manufacturing industry becomes increasingly more advanced and sophisticated, traditional powerhouse manufacturing countries of the 20th century (the United States, Germany, Japan, and the United Kingdom) that have continually invested in developing advanced manufacturing technologies are now seeing a resurgence in ranking, the report says.

This has helped to secure a top ranking in global manufacturing competitiveness in 2016 and these countries are expected to remain in the top 10 through the remainder of the decade. Leveraging their foundational strengths in innovation, talent, and strong industrial ecosystem clusters, these nations are competing with renewed strength and surpassing their low-cost rivals.

Driven by a focus on innovation and advanced technology, the shift to higher-value, advanced manufacturing is shaping a new battleground for global competitiveness going forward. As global manufacturing trends continue to shift toward higher-value products and services, many of these top performing countries, including the United States, have invested heavily in establishing national innovation ecosystems which connect people, resources, policies, and organizations to efficiently translate new ideas into commercialized products and services.

The report concludes these leading manufacturing countries are continuously investing in research and development (R&D) through public means while incentivizing the private sector to conduct its own research through the development of collaborative innovation ecosystems. The integration of government, academia, and private equity investors to build and sustain these ecosystems yields significant benefits for participating manufacturers.

It is no surprise that three of the top four most competitive nations – the United States, Germany, and Japan – were rated among the strongest global markets in terms of manufacturing innovation by executives surveyed in this year’s study. Even China earned top marks in this dimension, perhaps in recognition of a significant increase in R&D investment, which some experts suggest will surpass the United States by 2019.