China, India most competitive manufacturing hubs
June 28, 2010

Differentiated by innovative talent and an increasing number of research and development centers, China and India will maintain their global competitive edge in manufacturing for atleast five more years, according to the ‘2010 Global Manufacturing Competitiveness Index‘, a report by global consultancy Deloitte, and the US Council on Competitiveness.  According to the report, China ranks first and India second in manufacturing competitiveness.

“China and India have been emerging as global leaders in manufacturing for a number of years now, and this survey highlights the increasing dominance that these two major economies will continue to have over the remainder of this decade,” David Raistrick, the head of the U.K. manufacturing group at Deloitte, said in a statement. The U.S. ranks fourth, behind China, India and South Korea in the current index, with Brazil fifth and Japan sixth. Germany is the highest-ranked European nation, in eighth position, according to the index.

While China’s ascent to the top of the list is not surprising, the nation is expected to rule global manufacturing at least over the next five years owning to an abundance of highly skilled workers, scientists,researchers, and engineers as well as the government’s dedication to investments in science, technology and manufacturing physical infrastructure, in addition to a low-cost base. While the appreciation of the yuan will affect cost of manufacturing, it is not expected to raise costs, rather over the next few years, China is expected to raise the value of goods being manufactured domestically.

What surprised most analysts however, is that India stood at second position in this years global manufacturing competitiveness index and is expected to gain an even stronger foothold in the position over the next five years.

‘India’s rich talent pool of scientists, researchers, and engineers as well as its large, well-educated English-speaking workforce and democratic regime make it an attractive destination for manufacturers. Since the mid-1990s, India’s software industry has escalated to new heights and post-economic liberation has also opened a pathway to unprecedented market opportunities for Indian manufacturing. Moreover, beyond low-cost, Indian manufacturers gained experience in quality improvement and Japanese principles of quality management, with the largest number of Deming Award winners outside of Japan. The country is also rapidly expanding its capabilities in engineering design and development and embedded software development, which form an integral part of many modern-day manufactured products’, the report added.

With emerging economies of China and India leading the way, the report also describes how the global manufacturing epicenter is gradually shifting from the traditional manufacturing bases of the US, Germany and Japan to Asia. Innovative talent, lower costs, open government policies and global manufacturing projects are paving the way for this shift.


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