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with low export volumes for its sustenance. Due to this,
today when it has been rapidly exposed to global
competition, the industry increasingly finds itself
faced with the problem of inherently low economies of
scale, and a consequent unfavorable price structure. In
addition, the insularity had, in the past, compelled a
situation where there was little incentive for R&D
investments by way of quality improvements. As a
consequence, the industry today is saddled with
technologies whose cost-effectiveness is increasingly
compromised. Add to this the poor state of
infrastructural support from the government, the story
of the current state of the Indian manufacturing
industry may be complete. Its lack of a competitive edge
in the international trade today is largely due to this
situation.
There
is today then a compelling need for cost-competitiveness
on the part of the industry through upgrading of
workplace and manufacturing facilities. In this context,
a gradual shift towards “complete” automation /
computer-integrated manufacturing is inevitable. Also,
in the process sector in particular, this improvement in
technologies is imperative under the new regime of
stringent safety and environmental regulations. There
also has to be emphasis on enhancing exports. And
finally there is a need to gear up to meet the new
challenge of the GATT regulations ushering in a stricter
IPR regime.
The
key driver in the process of change would have to be a
focus on continuous reduction in production costs. Apart
from the measures mentioned in the forgoing paragraph,
by way of lowering costs the MI will need to explore
technology intensification through in-house development
(as opposed to purchasing it in the global market) as
well as energy |
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integration. Additionally, these measures will need to
be integrated with the rapidly emerging,
information management and e-commerce tools that permit
enhanced performance and productivity.
For India
in particular, one of the key strategies that this
scenario may demand is breaking of the relative
insularity between the industry, the academia, and the
national laboratories. There is a need for
preparing new roadmaps for collaboration between the
trio for sharing of capital and human resources towards
successful technology development and business
operations. On the other hand, the academia also needs
to reorder its academic and research programs, and
cultivate flexibility, so as to harmonize with the rapid
changes, and still act as the locale of scientific
research and development, and as a provider of skilled
manpower for the industry.
To summarize, the challenges facing the Indian
manufacturing industry today are manifold: new,
stricter, safety and environmental standards,
economizing the use of raw materials and curtailing
costs, and riding market volatilities. But in all this
technology development will remain the key to better
health of the industry and its sustenance. Following the
reforms there has been a good measure of strategic
alliances, joint ventures, technological collaborations
and inevitable mergers and acquisitions. But without our
own R&D efforts the ongoing influx of foreign brands is
bound to displace Indian brands, not only by virtue of
their intrinsic superiority but also by their sheer
financial and organizational muscle. The process can
lead to significant de-industrialization of the domestic
industry, an eventuality that could spell unfavourable
economic and social repercussions. |
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