The New - 20/20 Magazine

The Evolution of
Manufacturing Competitiveness
after enjoying decades
of leadership in global
manufacturing, north america
is facing growing competition in
the international economic arena.
Developing nations are leveraging
large labour pools and increasingly
sophisticated production strategies
to change the ground rules for global
manufacturing competitiveness.
From 1996 to 2008, the number of
developing countries with Fortune
global 500 facilities increased by 525
per cent, underscoring the scope and
magnitude of this trend. emerging
industrial centers like brazil, russia,
india, china and others, pose a direct
threat to north american job markets.
to mitigate these threats and bolster
domestic manufacturing bases, we
must change the conversation about
manufacturing to reflect that the
paradigm has shifted from a “goodsonly”
production model to encompass
research, design and service provision.
as a sector, manufacturing has
evolved, but our understanding of it
has not. in today’s global landscape,
manufacturers are inventors, innovators,
global supply chain managers and
service providers. meanwhile, the
source of our competition has evolved
as well. where labour costs were once
the main driver of north america’s
eroding competitiveness, the availability
and quality of talent is now the most
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by JacK mcDougle,
senior vice presiDent, tHe council on competitiveness
As a sector, manufacturing has evolved, but our understanding of it has not.
In today’s global landscape, manufacturers are inventors, innovators, global
supply chain managers and service providers
important ingredient for a competitive
business environment.
Findings from the newly-released
2010 Annual Global Manufacturing
Competitiveness Index, commissioned
by the council on competitiveness and
Deloitte, indicate that decision makers
are recognizing this critical shift. the
index, which polled more than 400
chief executive officers and senior
manufacturing executives worldwide,
identified talent driven innovation
as the central factor accelerating
economic competitiveness.
the index also delivered sobering
news regarding how executives
expect manufacturers in the western
hemisphere to fare in the next five
years. respondents targeted china,
india and the republic of Korea as the
most fertile ground for manufacturing
investment, now and in the five-year
outlook. sustained commitments to
science, technology and innovation,
coupled with strong national support
for the manufacturing sector, have
positioned these nations to dominate
high-value manufacturing in the near
and medium terms.
to continue to be manufacturing
leaders in this fundamentally new global
environment, north america must
develop a comprehensive strategy
that addresses these challenges.
the council on competitiveness is
launching a new multi-year project
to create a holistic manufacturing
strategy that will be delivered to
us private sector leaders, the
administration, congress, governors
and other key stakeholders at a national
manufacturing summit in late 2011.
the initiative will focus on
strengthening four pillars to support
a vibrant manufacturing sector in
the us, and its findings can provide
a manufacturing blueprint for the
entire region.
Talent
Despite unacceptably high
unemployment in north america, many
manufacturers are not finding the
middle-skilled workers with technical
training that they need. not only does
this harm the domestic economy, but
it contributes to the migration of entire
industries away from the region.
the largest number of jobs for the next
10-15 years will be in critical middleskilled
areas – these jobs pay relatively
well, but talent is in short supply. we
must focus state and federal workforce
training dollars, community college
curriculums and union membership
programs to meet these needs.
Technology
north america owes much of its
economic success to its leadership in
the technology sector. we are still the
uncontested leaders in computational
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