Deloitte Touche Tohmatsu Ltd. and the US Council on Competitiveness published their "2013 Global Manufacturing
Competitiveness Index," based on responses from 550 senior manufacturing execs worldwide. Here is what they say about the top five ranking countries.
China: In spite of its economic slowdown, China continues to maintain its rank as the most competitive manufacturing nation. Reasons cited are its labor and materials cost advantage, strong government spending in manufacturing and innovation, and an established supplier network. The report indicates that if China can continue to control its labor costs in spite of growing demands from its middle class, it can maintain its position overall. The country is losing strength to India, Indonesia, and Vietnam.
2013 index of the most competitive countries
Five-year prediction of the most competitive countries
Germany: Ranking highest in talent-driven innovation, Germany continues to make impressive gains since 2010. There is a renewed focus on manufacturing, and manufacturing exports nearly tripled between 2000 and 2011. The country is focusing on new technologies and a highly skilled workforce. It is dominating the field of "mechatronics," a multi-disciplinary field of science and engineering merging mechanics, electronics, control theory, and computer science.
United States: The study cites improvements, which account for a move from fourth place to third. Strengths include appeal as a manufacturing destination, core competency for talent-driven innovation, physical infrastructure, established supplier network, and a strong legal and regulatory system. An overall sense of uncertainty that plagues the US regulatory system is seen as a significant disadvantage. Expectations are that the country will fall behind in the future due to high labor costs and corporate taxes, GDP growth, and unemployment rates.
India: The country moved from second to fourth in rank since 2010. Concerns include the country's regulatory environment, high interest rates, and healthcare system, as well as under-developed physical infrastructure. It has a strong talent pool in science, technology, and research, as well as some of the lowest labor rates in the world. The country has a goal of moving its manufacturing share from 16 percent of GDP to 25 percent by 2022.
South Korea: The country declined two positions since 2010, and expectations are that the slide will continue and it will move to sixth place by 2018. Its competitive cost structure and product quality are advantages, as are favorable industrial policies and its highly educated and skilled workforce. Its complex policy and regulatory environment are seen as negatives going forward.
It seems expectations for Brazil are that the country's infrastructure will dramatically improve as it prepares for the World Cup in 2014 and Olympics in 2015. Extensive natural resources and a newfound research focus add to its strength.