Indian manufacturing leading in technology investment: Survey
Global manufacturers are investing heavily on technological upgradation not just for smoother transactions, but to gain a healthier return on investments (RoI). Manufacturers, around the world, are investing on process automation, cloud/software as a service (SaaS), industrial internet of things (IIoT)/internet of things (IoT),machine integration and machine learning/artificial intelligence. So, where does India stand as a leading manufacturing hub?
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New Delhi, March 15: India’s manufacturing segment has taken a vast leap in terms of technological advancement, efficiency and digital transformation. The country is fast replacing China as the number one destination for global manufacturing but has a rather long way to go to tackle supply chain disruption, worldwide inflation, shortage of raw materials and so on.
Survey outlook on Indian manufacturing
According to the 8th annual “State of Smart Manufacturing Report” by Rockwell Automation, India is fast adopting or actively evaluating solutions for smart manufacturing. The study surveyed more than 1,350 manufacturers across 13 of the leading manufacturing countries including India, China, Germany, Japan, the US, and the UK. The report found that digital transformation is being embraced to make manufacturing more productive and efficient, particularly in India. In terms of adoption of smart technologies, the survyed found that the top three destinations are China (70%), the US (60%) and India (57%).
The survey report states that while 39% of respondents are already using some components of smart manufacturing, survey participants do not currently use smart manufacturing technology but there is interest in using it.
Manufacturers in India are investing 35% of their operating budgets towards technology investment, ahead of the global mean average (23%) and countries such as the US (27%) and Japan (24%). The Rockwell Automation report indicates that the maximum number of manufacturing organizations investing in technology are from India.
Global Manufacturing Scenario
The report shows that over one thousand manufacturers surveyed in the 8th Annual State of Smart Manufacturing Report continue to face challenge along the lines of the current state of technology in global manufacturing.
- Almost 2 times as many respondents say they lack the technology to outpace the competition, compared to last year’s survey.
- 97% of participants reported that they are using or plan to use smart manufacturing technology over the next 1-2 years.
- More than two-thirds of manufacturers believe technology can be very helpful, or extremely helpful, in addressing workforce challenges.
- More than 50% more manufacturers are using Machine Learning/Artificial Intelligence compared to last year.
The maximum number of manufacturing organizations investing in technology are from India. On the workforce front, over two-thirds of global manufacturers believe that technology can be very helpful, or extremely helpful, in addressing these types of workforce challenges. The survey states that 89%of manufacturers expect to maintain or grow employment as a result of technology adoption.
53% survey respondents have said they adopt new technology aimed at minimizing disruption from workforce or supply issues, while 50% said they aim to shift their operations to the cloud for purposes including increased cybersecurity protection and business continuity. In terms of external
risks like inflation, supply chain, and workforce shortages, 44% respondents said mitigation tactic is adopting new technology.
Unstoppable growth awaits Indian manufacturing
As per the latest figures released by the Ministry of Statistics & Programme Implementation, in January 2023, the quick estimates of India’s industrial production index (IIP) with base 2011-12 stood at 146.5. The IIP climbed to 5.2% in January 2023, delivering a spectacular performance. The factory output had a significant rise from 4.3% in December 2022.
In 2014, India launched the “Make in India” campaign to raise its profile as a global manufacturing hub and encourage multinational companies to produce in India. Key industries such as aviation, defence, automobile and smart phone manufacturing have largely benefitted through PLI schemes. However, boosting manufacturing to 25% of GDP, a key objective of the Make in India initiative, has fallen short so far. The manufacturing sector is reeling under subdued demand in the international market, caused by the consequences of the third wave of Covid-19, the Russia-Ukraine war and continued global inflation. For India’s manufacturing to thrive, the nation has to closely monitor global demand trends, procurement capacity of leading destinations, and become price competitive against China.