7 New Manufacturing Trends for the Next Decade

A recent report by the World Economic Forum and Deloitte, points to some big changes ahead for manufacturing.

Many factors will influence the manufacturing and supply-chain landscape over the next few decades. Increased innovation and manufacturing capabilities and rising wages will transform low-cost labor countries into wealthier consumer markets. And macroeconomic and geopolitical challenges—including exposure to currency volatility, debt pressures and emerging protectionist policies—will all work to shape a new manufacturing reality.

Here are the 7 trends to watch for:

1. Stronger emphasis on infrastructure. As emerging nations focus on building a strong infrastructure, so developed countries must reinvest in maintaining their infrastructure in order to keep pace. The down-turned economy and debt crisis will hamper government funding of infrastructure projects in the developed world and so private-public partnerships will prove vital.

2. Competition between nations to attract foreign direct investment will increase. Foreign direct investment (FDI) more than doubled between 2006 to 2009 and continues to grow. Lack of public funding will increase competition for FDI and stakes will be high for companies as investment options become increasingly hard to differentiate and navigate.

3. Materials competition and scarcity will change resource strategies. The demand for rare earth elements increased six-fold from 2009 to 2010, with China being the biggest supplier. With increasing scarcity and rising costs countries will stockpile and hedge, and eventually we’ll have to start looking to science to develop alternative materials resources.

4. Clean energy will be top priority and serve as a competitive differentiator between countries and companies. By 2035 world energy consumption will have more than doubled. Energy costs will skyrocket and environmental and sustainability concerns will be even more pressing. Manufacturers must collaborate with policy-makers to develop responsible energy practices such as energy-efficient product designs to energy-efficient operations and logistics.

5. Innovative companies and countries will win the market. Innovative companies take twice the market share of non-innovators. Key to continued innovation is investment in university research in science and technology and ready access to a skilled workforce.

6. Countries with ready access to a skilled STEM workforce will lead the way. An estimated 10 million jobs with manufacturing organizations cannot be filled today due to a growing skills gap. Countries and companies that can develop and harness skilled human capital will rise to the top.

7. Policy-makers and manufacturers must engage more fully with each other. As competition around common resources and capabilities grows, policymakers will look for the right combination of trade, tax, labor, energy, education, science, technology and industrial policy levers to generate the best possible outcomes. Despite the oft strained relationship between policy-makers and industry, they will need to work together in an ever more complicated global balancing act.

Photo Credit: Kirsty Hall on Flickr (CC BY 2.0)

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