China, India most competitive mfg hubs: Deloitte

The country has emerged as the second most competitive nation when it comes to manufacturing competitiveness, next only to China, on the back of innovations and strong government support, says a survey.

As per the '2010 Global Manufacturing Competitiveness Index' report by the global consultancy major Deloitte, and the US Council on Competitiveness, the 'epicenter' for manufacturing is continuing to shift to the emerging markets, particularly in Asia.

India has been ranked second, after China, in terms of current competitiveness, ahead of dominant manufacturing super powers--the US, Japan and Germany--which are expected to become less competitive in the next five years, it said.

"India is now well positioned to become an active participant in the entire value chain. Presence of strong foundation in R&D along with the fact that India is now viewed as a place where product development can be done, both for local as well as international market, are the driving forces behind India's strong position," Deloitte India leader for manufacturing industry Kumar Kandaswami said.

The competitiveness index ranked top 26 countries.  The top 10 slots after China and India are occupied by South Korea at third place, US (fourth), Brazil (fifth), Japan (sixth), Mexico (seventh), Germany (eight), Singapore (ninth) and Poland (10th).

The report also notes that talent-driven innovation has been ranked the most significant driver of competitiveness in most markets. The top three drivers --talent-driven innovation, cost of labor and materials, energy cost and policies --remain relatively stable across all geographic regions, while some drivers showed a difference in rankings.

The survey is based on responses of more than 400 chief executives and senior manufacturing executives worldwide.

Asian executives ranked government investment in manufacturing and innovation much higher than their counterparts in other countries, the report noted.

For the next five years, the report forecasts emergence of a new group of leaders in the manufacturing competitiveness index. Asian giants like China, India and South Korea are projected to dominate the index in the next five years, as well. Other countries to watch out for are Mexico, Poland and Thailand.

The study also forecasts that the US may slip in the rankings from the present fourth slot to fifth by 2015-- the highest ranking country to show a decline--while China and India would remain in the first and second place.