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UAE leads Middle East in manufacturing competitiveness

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UAE leads Middle East in manufacturing competitiveness

Abdul Basit / 27 December 2012

The UAE ranked top among the most competitive manufacturing nations in the Middle East and the country is expected to continue the leading position in the next five years, according to Deloitte — a global consultancy and financial advisory firm.

In the region, three countries made the list of the most competitive manufacturing countries, including the UAE on top with 3.93 index score, followed by Saudi Arabia at 3.57 score, and Egypt scored 3.24 in the 2013 Global Manufacturing Competitiveness Index report from Deloitte’s Manufacturing Industry group and the US Council on Competitiveness

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Globally, the UAE ranked 30, Saudi Arabia at 34 and Egypt at 36 in the Deloitte index. The UAE will remain on top position in the next five year, according to Deloitte.

“UAE, Saudi Arabia and Egypt are expected to move up in ranking five years from now,” said Bakr Abulkhair, chairman and managing partner at Deloitte & Touche Bakr Abulkhair & Company, Saudi Arabia.

“The identified key dividers between established and emerging manufacturing markets, in the Deloitte report, should provide insights to Middle East countries and manufacturers to assist them in bridging gaps with developed manufacturing markets and building capabilities and economic and political infrastructures to drive growth and job creation in our region,” he added.

The report indicated that over the next five years, 20th-century manufacturing advocates like the US, Germany and Japan will be challenged to maintain their competitive edge to emerging nations such as China, India and Brazil.

The study confirms that the landscape for competitive manufacturing is in the midst of a massive power shift — based on an in-depth analysis of survey responses from more than 550 chief executive officers (CEOs) and senior leaders at manufacturing companies around the world.

The data reveals several divisions in competitiveness between established manufacturing players and their emerging counterparts. It said traditional manufacturing stalwarts are perceived to have an advantage with respect to talent-driven innovation. Emerging manufacturing nations will likely struggle to be competitive in regards to their legal systems, according to the report.

Established manufacturing nations scored far better than emerging manufacturing nations when it came to local economic, trade, financial and tax systems.

The report further said that superior healthcare systems will likely give established manufacturing nations a distinct advantage over emerging players, thanks to their access to quality care and regulatory policies for public health.

When looking at labour costs and availability, stalwart manufacturing nations find themselves squarely on the defensive. The newest of the emerging superpowers have a long way to go when it comes to supplier networks. Newer manufacturing players face an uphill battle when it comes to physical infrastructure competitiveness.

“The emerging superpowers in manufacturing will focus on building the advanced manufacturing capabilities and economic and political infrastructures that drive rapid growth and high value jobs for their citizens, forcing 20th century manufacturing powerhouses to fend off the growing strength of more focused global competitors,” said Craig Giffi, vice-chairman, Deloitte United States (Deloitte LLP) and consumer and industrial products industry leader, who co-authored the report and led the research-team.

The report found that access to talented workers is the top indicator of a country’s competitiveness — followed by a country’s trade, financial and tax system, and then the cost of labor and materials.

“Nothing was more important to CEOs than the quality, availability and productivity of a nation’s workforce to help them drive their innovation agendas,” said Giffi. “Enhancing and growing an effective talent base remains core to competitiveness among the traditional manufacturing leaders — and increasingly among emerging market challengers as well,” Giffi added.

 abdulbasit@khaleejtimes.com