Posted By Paul Tate, April 26, 2012 at 11:32 AM, in Category: Global Value Networks
Tomorrow’s manufacturing world could be very different from the way it is today.
Future manufacturers must be prepared for more localized manufacturing supply chains, rapid innovation, global talent wars, game-changing new material breakthroughs, extensive clean energy strategies, and far closer collaboration between policy-makers and business.
Those are just some of the conclusions in a new report published this month by the World Economic Forum and management consultants Deloitte Touche Tohmatsu. Called The Future of Manufacturing: Opportunities to Drive Economic Growth, it is based on extensive statistical analysis and the insights of manufacturing industry experts from the World Economic Forum and Deloitte during a year-long project.
The report predicts that: “While digital technology and free trade proliferation will continue to enable the flattening of the world and the globalization of manufacturing supply chains, the dominant factors that shaped the disaggregated supply chains we find today will not be the same as those that carry us through the next several decades.”
Manufacturing has certainly been an economic driver in recent times, it notes: “Manufacturing has been immensely important to the prosperity of nations with over 70% of the income variations of 128 nations explained by differences in manufactured product export data alone.”
But the report adds that there are now “some clear and important new trends emerging that will define manufacturing and competition over the next 20 years.”
Many of these factors, including rapid demand growth in emerging markets; powerful new competitors; and the increasingly complex challenges of global currency volatility, sovereign debt, and potential protectionist policies, are now “driving more localized manufacturing supply chains” that will come to dominate manufacturing’s future.
Integral to this new wave of manufacturing industry transformation, the report identifies seven key trends for the years ahead that its authors believe will “require the attention and collaboration of policy-makers, civil society, and business leaders”:
- The infrastructure necessary to enable manufacturing to flourish and contribute to job growth will grow in importance and sophistication, and be challenging for countries to develop and maintain.
- Competition between nations to attract foreign direct investment will increase dramatically, raising the stakes for countries and complicating the decision processes for companies.
- Growing materials-resources competition and scarcity will fundamentally alter country and company resources strategies and competition, and serve as a catalyst to significant materials-science breakthroughs.
- Affordable clean energy strategies and effective energy policies will be top priorities for manufacturers and policy-makers, and serve as important differentiators of highly competitive countries and companies.
- The ability to innovate, at an accelerated pace, will be the most important capability differentiating the success of countries and companies.
- Talented human capital will be the most critical resource differentiating the prosperity of countries and companies.
- The strategic use of public policy as an enabler of economic development will intensify, resulting in a competition between nations for policy effectiveness and placing a premium on collaboration between policy-makers and business leaders to create win-win outcomes.
Many of these key transformational trends will be discussed next week at our 2012 Manufacturing Leadership Summit in Palm Beach, FL (April 29-May 2), which has the dedicated theme of “The Future Manufacturer: Change the Rules, Rule the Future.”
Meanwhile, which of the World Economic Forum’s key conclusions do you think will have the most impact on your manufacturing business in the years ahead?
Paul Tate is Executive Editor at Manufacturing Executive.
Written by Paul Tate
Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive