There is a belief that a vast majority of population still needs to grow in terms of physical necessities and convenience that help them have better life. And the need for service will follow that. So if development has to happen for a region, it must grow internally and local manufacturing must grow significantly to provide goods to its people; on which service business would ride.
The growing concerns on comparatively reduced share of manufacturing to India’s growth, has only been part of the debate so far. The government seems to be serious and is due to unveil its ‘revolutionary’ manufacturing policy that has been in preparation for years and it now being fine tuned with changing conditions and aspirations. With only 15% of GDP coming from manufacturing, it is becoming worrisome as to how a largely service based Economy will sustain on this very flimsy manufacturing base.
The belief is growing that India’s aspirations to be an ‘assertive’ global player will not be achieved, if it does not grow as a manufacturing location. A preferred manufacturing destination may be involved in commissioning factory buildings, laying down logistical infrastructure and producing goods, but the end benefit of these actions can not be achieved without excelling and pushing boundaries of manufacturing. Remember, modern manufacturing has not been invented in India, nor any breakthrough process or technology has an India tag.
Thus far, Indian manufacturing has been floating in mid range manufacturing realm. This is far removed from levels of manufacturing that push boundaries of manufacturing and establish global leadership even to fulfill local demand.
One extreme of manufacturing is the mega manufacturing practices that are involved in setups required for large aircrafts, mega heavy machineries used in earth and freight moving, constructing mega structures etc. These require an expertise to understand scale and ability to take risk. It requires a commitment to long term experimentation, talent development and process innovation, to raise up to the occasion of doing big things. A look at National Geography’s films on Mega Structure & Mega Factories will tell you what it takes to arrive on the scene of mega manufacturing and construction. The excellence here is about the ability to manufacture physically overwhelming manufacturing, handle high level of uncertainties and still be able to deliver real huge things in time.
On the other side of the spectrum is micro & nano manufacturing. Micro electronics requires highly complex design, engineering and manufacturing skills. India is still waiting for its first world class Fab. The size here is about precision manufacturing of millions of low defect small things at breath taking speed.
A country can be said to have arrived on world manufacturing scene only if it has mastered the muscle of ‘mega manufacturing’ and the complexity of ‘micro manufacturing’. So we are in mm to cm and gmsto ton range; and we need to catch up a lot to be in micro or mega levels. All these at breathtaking speed.
India’s worry is not just about how it builds on its growth story but also, how does it prevent the undesirable effect of its growth. India currently imports about $45b of electronics and there is a genuine fear that electronics imports will overtake India’s oil bill soon. And so we now know why the new semiconductor policy is about to be announced, and Fabs are just about to look seriously at India.
Talking about excellence does not only mean managing manufacturing in micro and mega range; doing things faster than international benchmark without exhausting too much of resources and without taking real risk; is a subject we are too far from and a matter of another discussion.
So what’s your expectation from the new manufacturing policy ?
31 March 2014