Government regulations can have a major impact on a nation's domestic manufacturing sector. Most executives want simpler tax codes, fair trade policies and stronger energy and infrastructure regulations in addition to supporting technology that promotes advanced manufacturing, according to a recent report for the World Economic Forum.
"Manufacturing adds value - creating more jobs than any other sector, driving innovation throughout every segment of our society; and delivering consumer solutions - all of which are the keys to long-term, sustainable economic growth," said Andrew Liveris, global chief executive of the World Economic Forum's Manufacturing for Growth project.
Manufacturing executives said historically strong manufacturing nations need to fight to maintain a competitive edge. Germany has embraced innovation and new technology, but may struggle with energy and rising labor and raw materials costs. Japan is globally recognized for its manufacturing best practices, but faces difficulties from a shrinking population, high taxes and limited resources. Executives stated the U.S. will become a major manufacturing power if it can lower corporate taxes and develop policies that support energy production in addition to the creation of more manufacturing-focused education programs to produce more skilled workers.
Developing nations face different challenges
China is becoming the world's largest manufacturing economy, but it falls behind developed countries in environmental and energy policies. India wants to add 100 million manufacturing sector jobs by 2025, but executives felt the country's labor laws would have to be adjusted.
The findings indicate manufacturing is important to the health and development of a country's economy, and the industry needs policy support to succeed.
"The manufacturing sector is an important part of balanced economic growth and business leaders could not be more clear - effective government policies are critical for a country's manufacturing competitiveness," said Joe Echevarria, chief executive officer of Deloitte. "Manufacturing companies are anchors for national and global innovation, including leading research and development."