Connect with us

Reports

Semiconductors, Electronics and Pharmaceuticals Lead Digital Transformation in Manufacturing

Published

on

A new report launched today by the World Economic Forum reveals that the semiconductors, electronics and pharmaceuticals sectors are leading the way in the digital transformation of manufacturing.

The Manufacturing Transformation Insights Report 2022 offers new insights and findings emerging from the new Global Smart Industry Readiness Index (SIRI) initiative, which aims to build the world’s largest datasets and benchmarks on the state of manufacturing globally.

In collaboration with the Singapore Economic Development Board (EDB), the report draws on data from close to 600 manufacturing companies in 30 countries that underwent the Official SIRI Assessment (OSA): a two-day independent review of a factory or plant. The report outlines the current state of industrial transformation across different sectors, and presents detailed case studies on how different stakeholders – ranging from manufacturers to industry associations and governments – are actively leveraging the SIRI programme to accelerate their digital transformation journeys.

The top five most digitally mature sectors in 2019 and 2022.

Key findings:

1.Semiconductors, Electronics and Pharmaceuticals lead the 2022 Maturity rankings, with Logistics making gains
Despite their frontrunning positions, these top three industries are not shielded from present-day challenges like the ongoing value-chain disruptions, global chip shortage and industrial decarbonization. These developments will reshape the global manufacturing landscape and companies from these leading sectors – as long-standing pioneers of innovation and adopters of new concepts and technologies – must confront these topics proactively to redefine them into opportunities for all.

2. A high level of diversity exists across various industry sectors; more tailored approaches are required to better support industry transformation
Governments and solution providers tend to apply “one-size-fits-all” approaches in supporting manufacturers on their digitalization journeys, such as state-level subsidies for the adoption of new automation equipment or industry-led forums that study use cases of global companies. The impact and efficacy of such blanket interventions has been limited.

3. The most digitally mature companies are seeking to integrate their already digitized processes and systems, while the average manufacturer is still looking to digitize existing operational processes
New digital and hardware technologies, coupled with integrative design principles, have opened a world of possibilities for manufacturers. Over the past two years, most manufacturers have taken first steps towards digitalization in response to pandemic-related challenges. Companies which have started earlier are now progressing to the next level of integrating their digitized processes.

4. Top companies have focused significantly on Connectivity to enable greater integration and insights
In today’s digital economy, connectivity is fast joining automation as a key driver of success. Top companies acknowledge the importance of Connectivity. Many have already established interoperable and secure networks within their production sites, where equipment, machinery and computer-based systems can interact and exchange information with few restrictions.

5. Manufacturers should put more emphasis in refreshing and broadening their strategies for digitalization and workforce retraining
With the advent of digitalization, job scopes and work arrangements are evolving rapidly. As manufacturers formalize their digitalization strategies to upgrade their manufacturing and enterprise processes, there is a need to also re-examine the way they organize their workforce and workspaces as remote working becomes more prevalent in the digital era.

6. Productivity- and quality-linked KPIs are key focus areas of MNCs and SMEs, but flexibility and speed are fast-emerging areas of priority
Exponential demand growth, changing consumer patterns and chronic supply-chain disruptions during the pandemic have prompted some groups of companies to shift their focus to flexibility and speed-related KPIs to strengthen adaptability and resiliency. Initiatives that demonstrate such shifts include efforts by manufacturers to reorganize their supply chains based on regional geographical markets, practising dual/triple sourcing and adopting hybrid inventory management models that include elements of both “just-in-time” and “just-in-case” strategies.

7. Data confirms SME-dominated sectors are less mature than MNC-dominated sectors
Exponential demand growth, changing consumer patterns and chronic supply-chain disruptions during the pandemic have prompted some groups of companies to shift their focus to flexibility and speed-related KPIs to strengthen adaptability and resiliency. Initiatives that demonstrate such shifts include efforts by manufacturers to reorganize their supply chains based on regional geographical markets, practising dual/triple sourcing and adopting hybrid inventory management models that include elements of both “just-in-time” and “just-in-case” strategies.

8.MNCs and companies ahead of the maturity curve are more likely to plan for the long term
To support the international scale-up of SIRI, a new non-governmental, not-for-profit organization – International Centre for Industrial Transformation (INCIT) – has also been established. As a neutral, independent entity, INCIT will work with both the public and private sector manufacturing-related organizations to catalyze and support industrial transformation across geographies and industries.

As part of the launch of the report, the Forum and EDB will be co-organizing a webinar on 24 February 2022, 11.00 CET / 18.00 SGT. The webinar will include a presentation by the Forum on key findings from the report, as well as a panel discussion by key industry leaders. To sign-up for this webinar, please visit the event’s registration page.

Jeremy Jurgens, Managing Director of the World Economic Forum, said: “The Global SIRI Initiative is one of our fastest growing initiatives, having scaled internationally to more than 30 countries over the last 18 months. Through this report, we hope to revolutionize the way by which the global manufacturing community approaches digital transformation; from one that is anecdote-based to one that relies on a standardized methodology and is supported by quantitative insights.”

Beh Swan Gin, Chairman of EDB, said: “Our partnership with the Forum has established SIRI as an independent, international benchmark to accelerate the pace of transformation for the manufacturing sector around the world. The insights and real-life case studies presented in this report will provide public and private sector stakeholders with the ability to develop tailored interventions and uncover new opportunities that digital transformation can offer.”

Raimund Klein, Chief Executive Officer of INCIT, said: “We are confident that the findings from this second edition of the Manufacturing Transformation Insights Report will modernize the way by which the global manufacturing community approaches digitalization. As we progress into the post-COVID new normal, we invite manufacturers – of all sizes and industries – to take decisive action by leveraging the SIRI Programme to set themselves on the right trajectory for transformation.”

Continue Reading
Comments

Reports

Key Opportunities for Uzbekistan’s Development

Published

on

The World Bank has released its new Systematic Country Diagnostic (SCD) report for Uzbekistan, which analyzes key challenges and opportunities for the country’s development. The SCD contains policy recommendations for removing barriers to private sector growth, reducing the state’s role in the economy, focusing on people and their human capital, and transitioning to a green economy. The report provides the foundation for selecting priority areas for the World Bank Group’s cooperation with the Government of Uzbekistan throughout the 2022-2026 period.

In April 2022, the World Bank Group completed work on its second Systematic Country Diagnostic for Uzbekistan, following the first one that was produced in 2016. This flagship report is produced for a partner country every five years to identify key challenges and opportunities to ending poverty and boosting shared prosperity.

Since 2017, the Government of Uzbekistan has implemented transformative reforms to liberalize the economy and business environment, improve the well-being of citizens, and steer the state towards meeting people’s needs, most of which are analyzed in the SCD.

Planning the next generation of reforms, Uzbekistan has set ambitious goals of becoming an upper-middle-income country by 2030 and reducing poverty by half by 2026. Achieving these goals requires much higher economic growth than the current level through faster job creation and reduced economic exclusion— especially among youth, women, and people with disabilities.

“The World Bank’s SCD is a rigorous analysis of the key opportunities and challenges we face as a country. As the report notes, the analysis was prepared under a new era of openness, data transparency, and collaboration between the World Bank, the Government, and other development partners. The priority areas it identifies are fully aligned with Uzbekistan’s development strategy for 2022-2026,” noted Djamshid Kuchkarov, Deputy Prime Minister and Minister of Economic Development and Poverty Reduction of Uzbekistan.

The new SCD sets out four development pathways that can help Uzbekistan achieve these ambitious goals: 1) encouraging more private sector growth and job creation; 2) reforming the role of the state in the economy; 3) investing in people-focused policies and human capital; and 4) building an environmentally sustainable and resilient future.

The report also outlines thirteen priority policy areas that emerged from the analysis in the SCD. Some of the key policy priorities recommended by the World Bank focus on the following areas:

Encouraging private sector growth. The authorities should improve the allocation of land, labor, and finance, as well as the legal and regulatory framework for competition across the private sector; adopt trade and investment policies that favor the private sector’s global integration; establish strong private sector support services; accelerate agricultural market  reforms that, among other things, will end the state’s interference in the agricultural market.

Strengthening the market enabling role of the state. The authorities should accelerate the state’s transition from producer to market enabler with fewer and better performing state-owned enterprises; address infrastructure gaps; reduce corruption and improve governance across the state institutions; decentralize government functions; increase public accountability.

Improving human capital. The authorities should address gaps in education quality; improve access to early childhood and tertiary education; strengthen the performance and affordability of the health system; improve water and sanitation services across the country; improve poverty measurement, policy, and targeting; develop labor market policies encouraging the inclusion of vulnerable groups; increase the coverage and adequacy of social safety nets for those in need.

Building an environmentally sustainable and resilient future for Uzbekistan. The authorities should manage natural resources more effectively, including water and land, more  efficiently; take measures to decarbonize and modernize the economy, including the energy sector; improve natural disaster management.

“We are grateful to the Government for their close collaboration and for making available all necessary data needed to prepare the SCD. The report serves as an important foundation for the World Bank Group’s new Country Partnership Framework (CPF) for Uzbekistan, which will outline our financial and analytical support to Uzbekistan in implementing crucial reforms in the next five years,” said Marco Mantovanelli, World Bank Country Manager for Uzbekistan.

Continue Reading

Reports

New Resilience Consortium to Forge Strategies for Recovery and Growth in Face of Multiple Crises

Published

on

COVID-19, climate change and, most recently, the war in Ukraine and the ensuing refugee crisis, are the latest reminders of the unprecedented capacity of external shocks to disrupt economies and societies. In a world of continuous, overlapping disruptions, organizations need to build and manage resilience to secure a sustainable, inclusive future for all.

Resilience for Sustainable, Inclusive Growth, a white paper published today, outlines seven key drivers of resilience, which have fundamental, cross-cutting business, economic and societal implications: climate, food, and energy; people, education and organizations; healthcare; sustainable economic development; trade and the supply chain; digital trust and inclusion; and finance and risk.

The United Nations, the World Economic Forum, McKinsey Global Institute, the International Monetary Fund and other leading organizations estimate that a significant share of annual GDP growth will depend on the degree to which organizations and societies develop resilience. Growth differentials of between 1% and 5% globally can be expected depending on how leaders respond to the many challenges, including climate change, the energy transition, supply-chain disruptions, healthcare availability, and income, gender and racial inequalities.

The World Economic Forum, in collaboration with McKinsey & Company, is launching the Resilience Consortium, a new public-private leadership effort to drive global resilience. The consortium is bringing together leaders from the public and private sectors who are committed to advancing resilience globally – across regions, economies and industries. The aim is to develop a shared, comprehensive view of resilience and its drivers to help policy-makers and business leaders recognize the opportunities and lay the foundations of sustainable and inclusive, long-term global growth.

Building on existing Forum efforts on these resilience drivers, the Resilience Consortium will work to unlock synergies, accelerate collective action and enable a more systemic approach to investing in resilient economies and societies. The consortium will be led by a Steering Committee, comprising a dedicated group of public and private sector leaders across industries and geographies.

Experience of past crises has taught us five key lessons: managing disruptions defines sustainable growth more than managing continuity; crises evolve across categories and do not have single-point solutions; networks hide interdependencies, accelerating crises (as well as recovery); inadequate responses and unpreparedness can double the damage of crises; and crises disproportionately affect the most vulnerable in a society.

Børge Brende, President of the World Economic Forum,said: “Building greater resilience has become a defining mandate for this generation. The war in Ukraine is having a devastating impact not only on the people of the region but also knock-on effects on global commodity prices that may cause political and humanitarian crises in other parts of the world. There is an urgent need for more collective action and coordination by the public and private sectors to mitigate risks and sustain growth against disruptive shocks, especially among the most vulnerable populations. Policy decisions and financial commitments made today will determine the future course of the planet, economies and societies. Now is the time for action.”

Bob Sternfels, Global Managing Partner of McKinsey & Company, said: “Our research shows two things: 1) failure to invest in resilience is costly and far exceeds the cost of weather proofing ahead of disruptions; and 2) resilient organizations outperform non-resilients before, during and after crisis. We are convinced that public and private sector organizations must take a new approach developing resilience that goes beyond defensive stances. In light of today’s increased economic volatility, fundamental environmental and societal challenges, and continuous disruptions, the time is now to build resilience as a strategic muscle. The Resilience Consortium will work towards a common resilience framework for public and private-sector organizations that can help organizations drive sustainable, inclusive growth.”

Continue Reading

Reports

Global economic growth downgraded due to spillover from Ukraine war

Published

on

A woman walks past sandbags piled for defensive protection, in Odessa, Ukraine. © UNICEF/Siegfried Modola

The global economy is expected to grow by only 3.1 per cent this year, down from the 4.0 per cent projected in January, largely derailed by the war in Ukraine, according to the UN’s latest World Economic Situation and Prospects (WESP) report, launched on Wednesday. 

The mid-year forecast reveals how the conflict has upended the fragile economic recovery from the COVID-19 pandemic, sparking a humanitarian crisis in Europe, surging food and commodity prices, and exacerbating inflationary pressures. 

Global inflation is also set to reach 6.7 per cent this year, or twice the average of 2.9 per cent during the period from 2010 to 2020, with sharp rises in food and energy prices.   

Quick action crucial: Guterres 

“The war in Ukraine – in all its dimensions — is setting in motion a crisis that is also devastating global energy markets, disrupting financial systems and exacerbating extreme vulnerabilities for the developing world,” said UN Secretary-General António Guterres.    

“We need quick and decisive action to ensure a steady flow of food and energy in open markets, by lifting export restrictions, allocating surpluses and reserves to those who need them, and addressing food price increases to calm market volatility,” he added. 

The downgrade in growth prospects includes the world’s largest economies – the United States, China, and the European Union – as well as the majority of other developed and developing economies. 

Higher energy and food prices are particularly affecting developing economies that import commodities, and the outlook is compounded by worsening food insecurity, especially in Africa.  

Energy shock in Europe 

The WESP report, published by the UN’s Department of Economic and Social Affairs (DESA), examines how the spillover effects of the war in Ukraine are impacting different regions. 

Russia’s invasion began on 24 February, and in addition to the tragic loss of life and the unfolding humanitarian crisis – with more than six million refugees alone – it has also exacted heavy tolls on the economies of both countries.  

Neighbouring economies in Central Asia and Europe, including the European Union (EU), are also affected. 

The rise in energy prices has dealt a shock to the EU, which imported nearly 57.5 per cent of its total energy consumption in 2020. Economic growth is forecasted to grow by only 2.7 per cent, instead of the 3.9 per cent projected in January. 

Nearly a quarter of Europe’s energy consumption in 2020 came from oil and natural gas imported from Russia, and a sudden halt in flows is likely to lead to increased energy prices and inflationary pressures.

EU member states from Eastern Europe and the Baltic region are severely impacted as they are already experiencing inflation rates well above the EU average, the report said. 

Inflation woes 

In the world’s developing and Least Developed Countries (LDCs), high inflation is reducing the real income of households.   

This is especially the case in developing countries, where poverty is more prevalent and wage growth remains constrained, while fiscal support to lessen the impact of higher oil and food prices is limited.  

Rising food and energy costs are also having knock-on effects on the rest of the economy which is presenting a challenge to inclusive post-pandemic recovery as low-income households are disproportionately affected. 

Additionally, “monetary tightening” by the Federal Reserve in the United States, the country’s central banking authority, is also set to raise borrowing costs and worsen financing gaps in developing nations, including the world’s LDCs. 

“The developing countries will need to brace for the impact of the aggressive monetary tightening by the Fed and put in place appropriate macroprudential measures to stem sudden outflows and stimulate productive investments,” said Hamid Rashid, DESA’s Chief of the Global Economic Monitoring Branch, and the lead author of the report.   

Climate actions challenged  

The war is also unfolding at a time when global carbon dioxide (CO2) emissions are at a record high, and rising energy prices will also impact global efforts to address climate change.  As countries are looking to expand energy supplies amid high oil and gas prices, the report predicts that fossil fuel production is likely to increase in the short term.  

Meanwhile, high prices of nickel and other metals may adversely affect the production of electric vehicles, while rising food prices may limit the use of biofuels.  

“However, countries can also address their energy and food security concerns – brought to the fore due to the crisis – by accelerating the adoption of renewables and increasing efficiencies, thus strengthening the fight against climate change,” said Shantanu Mukherjee, DESA’s Director of Economic Policy and Analysis.    

Continue Reading

Publications

Latest

Trending