We are possibly living in a defining era – an era characterized by a borderless global village, with easy facilitation of trade and services and free flow of capital, goods and people. Further, a world that is in a constant state of motion has led to a complete metamorphosis of the dynamics of the global manufacturing landscape.
While the world is still recovering from the impact of the global economic downturn, manufacturing led by the automotive sector, is experiencing tectonic shifts. The changing legislative environment, promoting stricter emission and safety norms, is emerging as the prime mega driver of the automotive sector. A discerning customer, increasing urbanization and breakthrough technologies are adding to the complexity of the business landscape. OEM’s are focused on continuous product development and competitiveness is no longer determined by people arbitrage.
As a response, companies are reinventing business strategies. Global Production Networks (GPNs) and Global Value Chains are replacing linear engagements, rendering the term “country of origin” almost obsolete. Mega and regional trading blocks such as TPP and ASEAN are also important dimensions influencing these shifts.
The disruption of existing business paradigms is presenting opportunities that can be harnessed through a collaborative approach. Companies and countries that respond with agility will be able to tip the balance in their favour.
No economy, which is today a force to reckon with, has grown by ignoring its manufacturing sector. India’s manufacturing sector therefore needs to quickly align itself to the uncertain and ambiguous global business environment. Entrepreneurs, organizations and government, all have to make a conscious effort to leapfrog to the third stage. For India manufacturing is ever more critical because of the need to create almost one million jobs a month. Continuous skilling and reskilling, adoption of new technologies and integration into GVCs are undeniably the way forward for India’s manufacturing sector.
Over the years India has struggled to stand its ground as an attractive manufacturing destination. Apart from major automobile manufacturers of the world making India their base, we have also had some success in attracting R&D centers of numerous MNCs. Pharmaceuticals, biotechnology and electronics sectors are slowly beginning to gain international recognition. Alongside these pockets of manufacturing excellence, coexists in India a world that still lives partially in the agrarian age.
Led by a visionary Prime Minister, Government of India is cognizant of these new age challenges. The clarion call of “Make in India” along with “Digital India” and “Skill India” made by the PM, sit at the fulcrum of a well-calibrated national strategy, being driven in a mission mode. With various other initiatives aimed at reducing the cost of transaction and compliances, a multi pronged effort is being made to create an enabling eco system in India.
The views expressed are personal.