While Indian contribution to the global manufacturing pie has grown from 0.9% to just 2% in the past two decades, it has the potential for an unshackled rate of growth over the next 10 years.
While Indian contribution to the global manufacturing pie has grown from 0.9% to just 2% in the past two decades, it has the potential for an unshackled rate of growth over the next 10 years. According to a McKinsey report, by 2025, the country’s manufacturing sector could reach $1 trillion, contribute 25-30% to the GDP (from the current 16%) and create approximately 90 million jobs. The National Manufacturing Policy has set similar targets, including increasing encouraging technology adoption to make Indian manufacturing globally competitive.
There’s a lot going in favour of manufacturing community in India. With an expected GDP growth of 7.5%, India is set to emerge as one of the fastest growing economies, according to an IMF report. It has a young population, close to 600 million people below 25 years of age, and a workforce expanding by 13 million people every year. This demographic dividend will undoubtedly be the force behind Make-in-India, designed to “facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure.” With a clear vision and roadmap for economic reform, the government has initiated measures to improve the confidence of business and investors.
It bodes well for aspiring engineers, researchers and managers. Manufacturing companies are aware that, for success in India, they need to focus on constant collaboration and seamless technology transfer which ensures that localised products of high quality and customised features are available simultaneously across markets. Competitive advantage is built through “design, engineer, sourcing for manufacturing, manufacture, deliver” approach for the Indian market. Indian companies are facing global competition both in domestic as well as in global markets.
And this is not just applicable to larger, well-established manufacturing firms. Even SMEs are keen to have production technologies that can make them faster, more flexible and more efficient. The sector, consisting of 36 million units as of today, provides employment to over 80 million persons through more than 6,000 products contributing about 8% to GDP, besides 45% to the total manufacturing output and 40% to exports from the country. While larger manufacturers source up to 90% of components locally, nearly 20% of this is contributed by SMEs, who receive support to build their capability in the marketplace through skill development, transfer of technology and financial support.
The economic development of India, with a boost to the manufacturing sector, calls for a higher demand for professionals inspired by the Make-in-India drive to boost skill development and turn the country into a manufacturing powerhouse. This will transform the landscape of professional services and the competence of Indian professionals, resulting in them becoming a major force to reckon with.
As the government concentrates on initiatives to raise the skills and capabilities to suit manufacturing sector requirement, there is an increased thrust on industry-focused research in higher level educational institutions. In addition, it is important to inculcate the ‘culture of thinking’ at the school level to develop the young talent towards creative thinking and innovation for better technology innovation.
Digitalisation in manufacturing is opening up new opportunities to make products and solutions smarter. With our world becoming more connected, the Internet of Things will lead to collaborative ways for machines and people to interact. Innovative solutions in the fields of software and automation are increasingly finding acceptance among manufacturers, process industries or machine builders (OEMs). Today we have process control systems, totally integrated automation, integrated drive systems and engineering software that manages all plant data on a single platform—including initial planning in manufacturing—and the key to success will be seamless integration of product development and facility planning. This integration helps avoid late-stage changes to production processes that could increase the risk of escalating costs and disrupt commissioning.
Modern production methods are changing the skill-sets demanded by industry, with companies looking for workers who can use software to manage complex processes. The coverall is being replaced by the tablet PC, and the traditional image of the blue-collar industrial worker is becoming a thing of the past.
This means that for the manufacturing industry to expand and stay competitive, it needs a diverse workforce with high levels of expertise, capabilities and high level of engagement. Engineering talent will get to work on cutting-edge technology and drive innovation in merging real and virtual worlds.
The diverse and engaged talent could look forward to an empowered, high-performance culture, which encourages lifelong learning and development, offering attractive working environments and ensuring occupational health and safety.
Manufacturing and engineering companies are the real nation-builders, and talents who are part of this workforce have this additional incentive to make a mark in history. Because for India, this could well be the starting point of the future of manufacturing.
The author is executive vice-president & head, Digital Factory, Siemens India