The manufacturing sector tiptoes through the global economy like a silent chameleon, changing colors across the planet. The manufacturing industry in advanced nations has seen a downfall in the face of an escalating participation of developing countries in the same. Whether it is owing to the introduction of a new set of players in the game or a drastic technological evolution, the manufacturing sector has ultimately come to witness a transformation period. What do these changes mean on a global front and how will they affect the numbers? Manufacturing's global share towards GDP hit rock bottom in 2009 and it has very slightly improved over time. On the brighter side however, countries like China, Japan and Korea show a promising improvement in the manufacturing sector while other developing economies have also dipped their toes in the same. The industry has also experienced some noteworthy changes.
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| Source: building.co.uk |
Au contraire to the popular belief that the manufacturing and service sectors are fundamentally independent, these sectors are evolving in a way that goes hand in hand. Service inputs account for an increasing amount of manufacturing activity. A lot of employment in the industry revolves around service roles such as office staff support. Manufacturing will continue to generate employment of varying nature and contribute to the global economy.
The global consumption will also be directed differently. New sharks emerge in the developing economies and bring with them a wider set of possibilities. However, these opportunities are mingled up in uncertain environments. Rapidly rising wages in low cost labor markets, volatile resource prices, shortage of skilled labor and other challenges together lay down a shaky foundation for future industries here.
Technological innovations have taken giant leaps. Terms like the internet of things, Big data, cloud, mobility and analytics have become routine language. These advancements respond to increasing production requirements and the need to enhance efficiency of operations. This technological evolution further adds value to the manufacturing supply chain.
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| Source: building.co.uk |
Be it technological development, shift in employment generation, or a geographical shift in manufacturing productivity and consumption, the global scenario in the manufacturing sector has seen a dramatic structural change. This has led to integration in global value chains, shrinking of policy space in international order, the challenge of meeting jobless growth in manufacturing and a lot more decisions to be made.
According to Forbe’s report “Faster GDP is possible only if manufacturing is humming along strongly once again”. The need of the hour is greater emphasis on the improvisation of R&D facilities, increased Govt. support and embracing state of art technologies for strengthening the revenue generation, which can thereby prove to be a definite game changer. Despite the decline, the health of the manufacturing industry is constantly monitored as economists still believe that it holds the key to unlocking latent possibilities and hence provide the necessary foundation for an economically, socially and environmentally sustainable society
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