Manufacturing currently accounts for around 16% of global GDP and 14% of global employment, and there are no signs that it will slow down any time soon.
In fact, as technologies and consumer demand rapidly develop, the global manufacturing industry will continue to grow.
Before looking at the three reasons why manufacturing continues to grow globally, let’s take a look at how you can be part of the action. You could set up your own manufacturing company or you could set up a machine shop to produce parts and products for an existing manufacturer.
Either way, you should approach your startup in the same way as any other new business.
Start off by performing market research to determine which niche of manufacturing is right for you.
The best type of manufacturing business to launch will have high demand, a small entrance cost, and plenty of room for good margins. Producing consumer goods is one thing that ticks all those boxes.
Once you have chosen your niche, you need to write a solid business plan, which will include things like a financial plan, a marketing plan, and an executive summary. Getting your costs right is just one essential part of a business plan for a manufacturing company.
Thankfully, you can purchase used equipment from leading brands, such as multi-purpose equipment like an ironworker from Revelation Machinery, that works just as well as brand-new machinery, to help you lower your startup costs.
Check out this helpful guide to learn more about how to start a manufacturing business.
Now, let’s explore why manufacturing continues to grow globally.
Modern manufacturing has been evolving for decades, but its role is arguably changing even more right now, due to advancements in technology.
Furthermore, developing nations are becoming more advanced all the time, so there’s greater scope for manufacturing to promote innovation, productivity, and trade around the world in both advanced economies and growing economies.
The role of manufacturing is also changing in relation to the types of roles available. Traditionally, manufacturing and services were separate entities, but that approach is now outdated.
Service inputs, which include things like marketing and logistics, make up an increasingly large amount of manufacturing activity. Hence, manufacturing is growing globally in both production and services.
Indeed, in some manufacturing companies, over half of all employees are working in service roles like office support and engineering.
To give you an idea of how much services have grown in the manufacturing industry, in the U.S., every dollar of manufacturing output needs 19 cents’ worth of services.
Manufacturing is also growing globally because more and more distinct groups within the industry are arising, each with specific drivers for success.
Each group within the manufacturing industry has very different characteristics and requirements.
- Sectors that produce things like plastic products, fabricated metal products, and food and beverage products are growing throughout regional processing facilities.
- Sectors that produce things like motor vehicles, transport equipment, and electrical machinery, are becoming more globally innovative in local markets.
- Sectors that produce things like furniture, textiles, and toys are among the most labor-intensive, and therefore have a high demand for employees.
We touched upon developing nations earlier, but let’s explore their impact on the growth of global manufacturing in more detail.
Manufacturing is entering a new dynamic phase as a new consuming class emerges in developing countries. This is leading to additional global demand, so global manufacturers have significant new opportunities.
In fact, it’s thought that by the end of the decade, the majority of consumption will be taking place in developing economies and creating rich new opportunities.
Additionally, established markets within the manufacturing industry are seeing more and more fragmented demand. Customers want greater variations and more kinds of after-sales services.
Combined with new materials and processes, like nanomaterials and advanced robotics, there’s sure to be even higher global demand, and productivity gains will be driven further across different sectors and global locations.
It should now be clear why manufacturing is continuing to grow globally. Over the coming years, new technologies, new customer demand, and the growth of manufacturing in developing countries will all contribute to the expansion of global manufacturing.
So, there has perhaps never been a better time to get involved with the manufacturing industry yourself.