Global Skills Gap Leaves 10 Million Manufacturing Positions Unfilled

by CFO Innovation Asia Staff, 10 July 2012

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Human Capital Management Management

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Deloitte Touche Tohmatsu Limited manufacturing skills development World Economic Forum

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The future of global manufacturing is turning into a competition for global talent, according to a new report, which estimates that 10 million manufacturing jobs worldwide cannot currently be filled due to a growing skills gap.

"The Future of Manufacturing: Opportunities to Drive Economic Growth", released recently by the World Economic Forum and Deloitte Touche Tohmatsu Limited, says the skills shortage is pervasive despite the high unemployment rate in many developed economies where companies are struggling to fill manufacturing jobs, such as highly trained workers and engineers.

At the same time, emerging economies cannot fuel their growth without more workers in the skilled production category.

"In the race to future prosperity, nothing will matter more than talent," says Craig Giffi, Vice Chairman and Consumer & Industrial Products Industry Leader at Deloitte LLP in the United States.

"The skills gap that exists today will not likely close in the near future, which means companies and countries that can attract, develop and retain the highest skilled talent—from scientists, researchers and engineers to technicians and skilled production workers—will come out on top."

While skills gap is a tough challenge for many countries, talent commitment will stand China in a good stead in developing its manufacturing industry, says Rosa Yang, Manufacturing Industry Co-Leader of Deloitte China.

"According to our previous analysis, a vast pool of quality talent from different academic background will become available for the sector in the next 10 years and this will be a strong boost for China's manufacturing industry to move up the value chain," says Yang.

Innovation leads to differentiation

According to the report, innovation will play a key role in determining which countries and companies can succeed in global manufacturing looking two decades down the road.

"Companies regarded as more innovative grew net income nearly two times faster from 2006 to 2010 than their non-innovative counterparts," says John Moavenzadeh, Senior Director for Mobility Industries at the Forum. "Meanwhile, countries that are more successful at fostering innovation performed better when it comes to both gross domestic product (GDP) and GDP per capita."

Ricky Tung, Co-Leader of Manufacturing Industry, Deloitte China continued, "Gone are the days when China can outstrip other countries with low labour costs. China needs to develop its competitive edges in order to sustain its leadership. The country's 12th Five-Year Plan has clear goals to develop the high-end sectors within the manufacturing industry and there are incentives to encourage innovation."

The bottom line is that manufacturers must innovate to stay ahead of competition. They must also be enabled by infrastructure and a policy environment that better supports university and research lab breakthroughs in science and technology.

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