Global Agenda Council on Advanced Manufacturing 2012-2013
The manufacturing sector is a fundamental part of the global economic growth for emerging economies and developed markets. Over the past decades, the globalization of the manufacturing ecosystem has driven more change and impacted the prosperity of more companies, nations and people than at any time since the Industrial Revolution. Manufacturing has been a key driver of higher-value job creation and a rising standard of living for the growing middle class in developing and emerging economies. In effect, the manufacturing industry has radically transformed the nature of competition between developed countries and emerging economies.
Despite the industry’s importance, statistics reveal that, between 1985 and 2008, manufacturing’s global added value decreased from 35% to 27%. Yet many countries, including developed and emerging economies, have made manufacturing one of their key priorities. Indeed, in 2011, India launched its 12th Five-Year Plan, aiming to increase manufacturing’s share to 25% of GDP and create 100 million additional jobs. The United States, through the Obama administration, has also made manufacturing one of the country’s key priorities.
Manufacturing has become a highly complex activity and is affected by many key factors, including government policies, trade agreements, workforce and talent development, wage growth, FDI, energy supply, access to resources, innovation ecosystems and currency exchange.
The fundamentals behind a successful advanced manufacturing strategy include identifying and addressing capability and innovation gaps through manufacturing, effective FDI strategies, strong talent and infrastructure development and access to finance. Yet, there are a number of trade-offs and conflicting requirements when establishing a more comprehensive and sustainable manufacturing strategy, including between local jobs and global outsourcing, job creation and productivity, protectionism and free trade, national technology development and technology transfer, and short-term and long-term strategies.
- India aims to increase its manufacturing sector’s contributions to GDP from 16% to 25% in the next 10 years and generate 100 million additional jobs
- Annual FDI inflows for manufacturing more than doubled to an average of US$ 350 billion from 2006 through 2009
- An estimated 10 million jobs with manufacturing organizations cannot be filled today due to a growing skills gap
Following the recommendation of several Forum constituents, the Council on Advanced Manufacturing was launched in 2011. Although many nations have made manufacturing one of their key priorities, there is little awareness of the importance and opportunities linked to the manufacturing industry.
To be able to develop concrete recommendations, the Council defined what is meant by “advanced manufacturing”; identified key trends impacting the global manufacturing ecosystem; outlined a framework that highlights the need to align interests of the three major stakeholders, namely, governments, businesses and society at large.
The following definition of the concept of Advanced Manufacturing was developed by the Council:
Advanced manufacturing is the technological, organizational, social and environmental strategies that improve manufacturing so that it can meet the goals of enterprises, society and governments and adapt to change. This definition reflects the growing level of embeddedness brought by supply chain management of the functions of production, distribution and consumption.
The Council mapped the fundamentals behind a successful advanced manufacturing strategy, including identifying and addressing capability and innovation gaps through manufacturing, effective FDI strategies, strong talent and infrastructure, and access to finance. Putting manufacturing back at the centre of country competitiveness can help address, in the longer term, both job creation and higher productivity.
To raise awareness on the importance of manufacturing, the Council published a white paper entitled Enabling Sustainable Global Manufacturing. The paper will provide a framework of the context, drivers, new models and recommendations that have an impact on global sustainable manufacturing.
To move their work forward, the Council is exploring ways to:
- Develop an industry analysis matrix
- Create a manufacturing competitiveness index
- Contribute to the Manufacturing for Growth initiative of the World Economic Forum