MITI-V, which includes Thailand, could represent a ‘New China’ of manufacturing
THE RISE of the “MITI-V”
They are all expected to be included in the top 15 nations by 2020 and could represent a “New China” in terms of low-cost labour, agile manufacturing capabilities, favourable demographic profiles, and market and economic growth.
The prediction is based on an in-depth analysis of responses from more than 500 chief executive officers and senior leaders at manufacturing companies throughout the world to a survey by Deloitte’s global consumer and industrial products industry group and the US Council on Competitiveness.
As in the 2010 and 2013 “Global Manufacturing Competitiveness Index” reports, the executives ranked 40 countries on their current and future manufacturing competitiveness and also rated the top drivers of global manufacturing competitiveness.
Although all but Vietnam showed a drop in overall competitiveness ranking from 2013-16, viewed as a group, the MITI-V nations can be seen as offering an attractive option for market and economic growth as well as growing the customer bases of manufacturers.
“The Southeast Asian countries of Indonesia, Malaysia, Thailand and Vietnam continue to garner the interest of global manufacturers looking for alternatives to China with the availability of skilled workforces and growing labour productivity, as well as a lower manufacturing labour cost in comparison to China,” Ng Jiak See, leader of industrial products and services for Deloitte Southeast Asia, said yesterday.
“Other advantages that these countries offer to global manufacturers include numerous tax incentives in the form of tax holidays ranging from three to 10 years, tax exemptions or reduced import duties and reduced duties on capital goods and raw materials used in export-oriented production,” she said.
From a global perspective, the United States is expected to become the most competitive manufacturing nation in five years, with the current leader, China, slipping into second position.
“‘Made in the USA’ is making a big comeback,” said Deborah Wince-Smith, president and CEO of the US Council on Competitiveness.
“Contrary to the view that manufacturing is falling behind the times, the study points to a manufacturing future characterised by advanced technologies and growth through innovation.
“Manufacturing is sustainable, smart, safe and surging – and America is expected to be among the leaders in this industry transformation.”
CEOs say advanced manufacturing technologies are a key to unlocking future competitiveness.
Predictive analytics, the network connectivity of common objects known as the “Internet of Things”, smart products and smart factories that are helping to define “Industry 4.0”, and advanced materials are viewed by executives as crucial to global manufacturing competitiveness.
“The US is currently among the top nations unlocking advanced manufacturing technologies including smart, connected products and factories, predictive analytics and advanced materials that are core to future competitiveness,” said Craig Giffi, vice chairman of Deloitte in the US and leader of its US automotive sector.
“The US excels at creating connections and synergy among people, technology, capital and organisations to form a cohesive ecosystem of innovation, generating tremendous value from investments in research and development.”
While emerging economies have an advantage over advanced economies on issues of labour and material costs, advanced economies lead their developing counterparts on labour productivity.
“Singapore, while considered a relatively high-cost manufacturing location in Southeast Asia, is still likely to remain among the most competitive in the region in the future,” Ng said.
“With its highly educated workforce, an investment-friendly business climate, generous R&D incentives, high-quality infrastructure and good governance, the trajectory of Singapore’s manufacturing sector will be one that is propelled by investments in talent and innovation.”
