According to the Deloitte 2016 Global Manufacturing Competitiveness Index, CEOs globally believe that advanced manufacturing technologies are key to unlocking future competitiveness.

“As the digital and physical worlds converge within manufacturing, executives indicate the path to manufacturing competitiveness is through advanced technologies, ranking predictive analytics, Internet of Things, both smart products and smart factories through Industry 4.0, as well as advanced materials as critical to future competitiveness,” says Deloitte Africa director and leader of Deloitte Africa Industrial Products and Services Mike Vincent.

The index showed that two regions – North America and Asia Pacific – dominate the competitive landscape in terms of boasting nations in the top ten for manufacturing competitiveness. All three North American countries (Canada, the US and Mexico) are in the top 10 and are expected to remain in the top 10 ranking five years from now. As many as five Asia Pacific nations (China, Japan, South Korea, Taiwan and India) are expected to feature in the top ten by 2020, leaving only two spots remaining, which are filled by Germany and the UK.

Leading twenty-first-century manufacturers have fully converged the digital and physical worlds where advanced hardware combined with advanced software, sensors and massive amounts of data and analytics will result in smarter products, processes, and more closely
connected customers, suppliers and manufacturers.

“Top-performing manufacturers will continue to embrace advanced technologies to drive innovation, differentiation, cost competitiveness, and speed to market to set themselves apart from peers,” notes Vincent.

Of the BRIC countries (Brazil, Russia, India and China), only China is viewed by executives as a top 10 manufacturing nation in 2016. The other three BRIC nations have experienced a
significant decline in their rankings over the last few years. Among the three, Brazil has had the steepest fall, ranking twenty-ninth in 2016, compared with eighth and fifth in 2013 and 2010 respectively.

Similarly, Russia slumped further down the list to thirty-second in 2016 from twenty-eighth in 2013 and twentieth in 2010. On the other hand, the prediction is that following a slide from fourth in 2013 to eleventh in 2016, India’s position will improve to fifth spot by 2020.

Consistent with the 2010 and 2013 reports, Deloitte mentions that manufacturers continue to rank talent as the most critical driver of global manufacturing competitiveness.

Owing to this, the index suggests that companies need to increase their focus on creating differentiated talent strategies to ensure they are regarded as “employers of choice” and able to attract top talent.

“Acquiring, developing and retaining talent, as well as identifying and nurturing new models that leverage key sources of talent outside of the organisation, will be critical to establishing long-term competitiveness going forward,” says Vincent.

Recognising the significant economic benefits of a strong manufacturing base, the index highlights that countries with unfavorable or overly bureaucratic manufacturing policies are working to improve and reform those systems, invest in greater development, and strengthen overall manufacturing infrastructure.

The index concludes that top companies, in turn, are benefiting from new public–private partnership models resulting in nontraditional business alignments as the competitive playing field undergoes a significant transformation at both company and country level.

Deloitte will publish the Africa version of the Manufacturing Competitiveness Index in due course.