Latest global manufacturing competitiveness rankings present challenge for Australia has been saved
Latest global manufacturing competitiveness rankings present challenge for Australia
7 December 2015: Australia’s manufacturing competitiveness ranking has declined from 16th to 21st position since 2013, according to the 2016 Global Manufacturing Competitive Index report from Deloitte Global and the US Council on Competitiveness.
And the ranking risks slipping further, to 22nd by 2020, reflecting ever-increasing competitiveness in global manufacturing.
Over the next five years the US is expected to become the most competitive manufacturing nation, with the current leader China sliding to second. The prediction is based on an in-depth analysis of survey responses from more than 500 CEOs and senior leaders at manufacturing companies around the world.
The Index also highlights the global drivers of manufacturing competitiveness, with talent, cost competitiveness and productivity filling the top three places.
Deloitte Australia Partner and Manufacturing Group leader, Damon Cantwell, sees this as the silver lining for the country. “We are strong in eight of the 10 top competitiveness drivers on a global basis. This suggests Australia should be occupying a higher position in world rankings,” he said.
“The disconnect reflects the need for Australia to better tell its story. The pursuit of footloose manufacturing investment is extremely competitive internationally, and governments are in a market of their own in this field. It is vital Australia’s positive attributes are being promoted in a targeted manner.”
He said Australia should also take heed of the forecast ability of the US to take the top spot in five years’ time, which is largely due to the country’s investment in research, technology and innovation. This enhances the competitiveness of US industries and drives economic development, according to the study Advanced Technologies Initiative: Manufacturing & Innovation, a 2015 report also published by Deloitte Global and the Council.
Twenty first century manufacturing competitiveness, increasingly propelled by advanced technologies, is converging the digital and physical worlds, both within and beyond the factory, to both customers and suppliers, creating a highly responsive, innovative and competitive global manufacturing landscape.
“Given these global trends, the uptake of advanced manufacturing techniques in the Australian sector is the key to future consolidation and growth,” said Cantwell. “These innovations change the basis of competition for Australian manufacturing away from cost only, which suits the structure of the local manufacturing sector. Success here is also dependent on improving the relationship between industry and the R&D sector.”
According to the 2016 Global Manufacturing Competitiveness Index, the top 11 countries will remain consistent between now and 2020, although with some exchange of rankings. The next nine spots, however, show how the industry anticipates developing markets will continue to mature and become more formidable over the next five years.
“These movements reflect the degree of change over the next five years in these global competitiveness rankings, and underline the importance of Australia enhancing its pitch to international manufacturing investors,” Cantwell concluded.
About the study
The 2016 Global Manufacturing Competitiveness Index is an initiative led by the US Council on Competitiveness and Deloitte Touche Tohmatsu Limited designed to determine how CEOs view the competitiveness of the manufacturing industry in different countries around the world. A global CEO survey, which generated responses from over 500 CEOs and senior executives, offers perspectives on the most important factors that drive manufacturing industry competitiveness. The global survey results also helped to create a unique Global Manufacturing Competitiveness Index ranking the relative manufacturing industry competiveness of countries and reflect how executives perceive this may change over the next five years. The in-depth study seeks to define excellence in manufacturing and draw out the implications for manufacturers in terms of the competencies required to develop and sustain an edge in a new competitive landscape. Participants were also asked to provide their views of the global economic conditions and government actions that can bolster competitiveness in the manufacturing industry.
The 2016 Global Manufacturing Competitiveness Index is an updated research effort that was first conducted in 2010 and then again repeated for 2013. Prior copies of those research findings are available on both Deloitte and the Council’s websites, or available upon request.
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