American flag colliding with Chinese flag painted on fists

U.S. Manufacturing is Headed for No. 1

April 1, 2016
Experts predict U.S. manufacturing will overtake China as the world's most competitive manufacturing nation by 2020

A new survey of global CEOs and other senior executives shows that advanced manufacturing technologies are helping to push the United States back toward being the most competitive manufacturing nation in the world.

This momentum should be enough to push the U.S.—a now ranked second under China as the world’s most competitive manufacturing nation—up to the top spot by 2020.

U.S. manufacturers are investing in technologies such as predictive analytics, the Internet of Things (IoT), smart factories, and advanced materials that will be keys to improved competitiveness in the coming years. Other traditional manufacturing powerhouses – Germany, Japan and the United Kingdom – are making similar investments that will maintain or improve their competitive positions.

While technology is a critical factor in future competitiveness, manufacturers rank talent as the most critical driver of competitiveness. Just behind is cost competitiveness and productivity, not surprising given slow growth in most economies, and then supplier network.

Compared to the 2013 survey, U.S. manufacturing executives were more favorable about policies in the country. They cited as helping to create a competitive advantage U.S. policies on sustainability, technology transfer, monetary control, science and innovation, foreign direct investment, intellectual property protection, and safety and health regulation. Working against U.S. manufacturers, said survey respondents, were policies on corporate tax rates, healthcare, labor, and taxation of foreign earnings.

The survey shows two strong regions for manufacturing have emerged. For North America, the United States, Canada and Mexico are all in the top 10 most competitive countries today and will remain so in 2020, executives predict. By 2020, the top 10 is also expected to have five Asia Pacific nations – China, Japan, South Korea, Taiwan and India. India is expected to jump from number 11 in 2016 to number 5 in 2020.

The report concludes that the most competitive manufacturing nations are embracing higher-value manufacturing profiles reflective of Industry 4.0. “In the wake of this transformation, the days when a country could establish a position of manufacturing dominance on the back of a single point of strength, such as cost competitiveness, are decidedly gone,” the report notes. “In fact, leading countries are taking a much more balanced approach to talent, cost competitiveness, and innovation to set themselves apart from the global crowd.” 

Read the full report on IndustryWeek.

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