Manufacturing 4.0 Relevance to Commonwealth Developing Asia
This section provides background information and analysis of the relevance of Manufacturing 4.0 to Commonwealth Developing Asia, according to UN classification.
These countries are: Bangladesh, Brunei Darussalam, India, Malaysia, Pakistan, Singapore and Sri Lanka.
Bangladesh, though classified as a LDC, is including amongst these developing economies to allow for regional comparison and analysis. Bangladesh is the sole Commonwealth LDC in Commonwealth Asia.
Geographically, four of these countries are in South Asia and three are in Southeast Asia.
Maldives is grouping amongst other island states as a Commonwealth SID (see Commonwealth SIDS section).
This remaining grouping allows for the most coherent analysis given their similar stages of development, similar challenges, and maturity of their manufacturing sectors, as compared to LDCs or SIDS.
Commonwealth Developing Asia member states
Regional Manufacturing Trade & Value-Add
All stats most recent available. Source: World Bank
Manufacturing baseline in Commonwealth Developing Asia
Manufacturing contributes US$765 billion of Manufacturing Value Add (MVA) in the nine Commonwealth Developing Asia countries. This represents 16% of regional GDP, which is highest amongst all Commonwealth regions outside of advanced economies by some margin. This is more than five times the MVA of the nine countries in Commonwealth Developing Africa as is fairly balanced between Commonwealth South and Southeast Asia, even when excluding the very large Indian economy.
The nine countries collectively run a merchandise trade deficit of around US$150 million, driven exclusively by the South Asian countries. All three Southeast Asian countries run merchandise trade surpluses, led by the export-oriented economies of Singapore and Malaysia.
Commonwealth Developing Asia snapshot
- Manufacturing value added (MVA) totals US$765.3 billion, or 16% of total output (GDP) of the nine countries
- Manufactures comprise nearly all of Bangladesh's merchandise exports (96%), the proportion amongst the 50 non-advanced Commonwealth countries, as well as more than three quarters of Singapore (77%) and Pakistan's (75%) merchandise exports
- Malaysia (23%), Bangladesh (21%) and Singapore (21%) have the highest manufacturing value add as a percentage of GDP in Commonwealth Developing Asia
- India naturally dwarfs the other economies in the region, accounting for 66% of the collective GDP of Commonwealth Developing Asia, followed by Bangladesh at 9%
- India also accounts for 75% of the regional population, and together with Pakistan (12%) account for nearly four-fifths the population of Commonwealth Developing Asia
- Singapore has by far the highest GDP per capita in the region at US$72,794, nearly seven timer higher than second place Malaysia and higher than any other Commonwealth developing country
Manufacturing value-add contribution to national GDP
Manufacturing contribution to Commonwealth Developing Asia MVA
Manufacturing value-add contribution to national GDP
Manufacturing contribution to Commonwealth Developing Asia MVA
Manufacturing value-add contribution to national GDP
Manufacturing contribution to Commonwealth Developing Asia MVA
Challenges to M4.0 Development
The following provides a series of examples for how Manufacturing 4.0 technologies can address specific industrial challenges faced by Commonwealth Developing Asia.
Many of these countries are much larger in terms of geography, population and economies that Commonwealth LDCs or SIDS, which can significantly magnify or diminish the severity of these challenges depending on national contexts. Attempts are made here to generalise challenges, while recognising the significant diversity of countries and economies in this grouping. Each country will face these challenges in more or less acute ways, as well as face their own unique challenges due to national circumstances.
Developing Asia Regional-level Challenges
- Supply chain challenges: Developing Asia countries are the heaviest importers/exporters of the regions in this guide, making them most exposed to supply chains issues such as cost and capacity constraints on land/sea routes, availability of components, geopolitical turbulence, etc.
- Demand fluctuations resulting from post-pandemic global macroeconomic circumstances can have a heavy impact on export-oriented economies, particularly in discretionary categories such as apparel.
- Material and labour shortages resulting from post-pandemic disruptions can impact manufacturers ability to produce or produce at adequate levels
- Competition: several Developing Asia countries compete in similar areas of manufacturing production and export.
- Climate Change: Many Developing Asia countries face adverse impacts because of climate change, which can impact production capacity and hinder foreign investment in the manufacturing sectors of these countries.
Developing Asia Country-level Challenges
- Production facilities can halt due to unusual weather conditions, impacting labour availability access to inputs, and requiring repairs to damaged plants and equipment.
- Brain-drain at higher levels, as highly skilled professionals are pulled towards advanced economies where there are greater perceived opportunities.
- Small technical labour forces in some Developing Asia countries can limit their ability to move up the value chain to more specialised higher value-added manufacturing activities.
Example M4.0 solutions to regional industrial challenges
Supply chain challenges
- Potential solution: more sophisticated forecasting and planning with additional variables for new macro disruptions take into account
- M4.0 application: employing software packages that take advantage of big data and analytics can help with more accurate forecasting in a more uncertain environment
Material and labour shortages
- Potential solution: automated technologies reduce the labour intensity of production
- M4.0 application: employing increased automation in production lines such as robots or AI/ML-enhanced software applications can reduce the need for physical workers to complete certain task
Competition
- Potential solution: identify new product and market opportunities, prioritising specific sectors to national circumstances
- M4.0 application: employing any number of M4.0 technologies in combination with particular areas of national economic competitiveness can lead to diversification within existing industries, improve efficiencies, and create novel revenues for local manufacturers
Small technical labour forces
- Potential solution: enhancing skills of local populations to improve enterprise productivity and enable a future-ready workforce
- M4.0 application: a M4.0-ready workforce can be developed by supporting local curriculum reform and focusing vocational education on STEM subjects
Climate change impact
- Potential solution: employ AI-enhanced and ML-enhanced tools to improve forecasting of extreme or unusual weather events
- M4.0 application: enable better forecasting of unusual or extreme weather events which may allow advance preparations to be made to partially mitigate the impact of these events on production facilities
Energy costs
- Potential solution: employ sensors and IoT-enabled devices to better track energy usage
- M4.0 application: sensors can provide more detailed information and real-time visibility of energy usage, identifying areas for efficiency gains while identifying problems areas and wastage
M4.0 Application in Commonwealth Developing Asia
Big Data & Analytics
Large amounts of data are analysed by advanced computing technology to provide insights and predictive analysis to support decision making.
Regional Application
Application to large scale production sites which generate significant amounts of data where small efficiency gains will have disproportionately positive impacts. If firms come together to share data, they could distribute the costs for meaningful insights in sectors/countries where cost pressures are an issue.
Autonomous Robots
Autonomous robots are used in manufacturing to hold and move heavy items on a production line and can also help with order picking at the warehouse level.
Regional Application
Although perceived to compete with low wage labour, autonomous robots could significantly enhance efficiency as well as safety, and potentially mitigate regional challenges such as labour shortages.
Simulations / Digital Twins
Real world environments can be simulated virtually, such as entire factory floors using sensors. This allows experimentation, virtual training or exploration without the need to visit or modify real world sites. Additionally, entire product information life cycles can be retained from primary production to end user.
Regional Application
This can be applied to light industrial sectors where efficiencies are crucial to competitiveness. Further applications can include:
- Upgrading existing manufacturing sites to more advanced production methods and processes, without disrupting ongoing operations.
- Sensing soil fertility to maximise agri-production: advanced analytics could determine when to replace older plant varieties for new ones to maintain sustainable plant stocks.
Horizontal/Vertical Data Integration
Large producers have capabilities to share data within their own firm (vertical data integration); further maximised by sharing relevant data with other firms in the value chain such as suppliers (horizontal data integration).
Regional Application
Applications can include:
- At largest firms where it makes sense to integrate large pools of data.
- Manufacturing sectors with long supply chains and export orientation could benefit from shared data, e.g., logistics and tracking information.
- Value added features such sustainable and organic labelling of fishery or agri-produce could benefit from enhanced quality assurance enabled by data integration.
Internet of Things (IoT)
Internet of Things (IoT) is enabled by small sensors with computing capabilities that deliver real-time information. A simple example is the use of radio-frequency identification (RFID) devices to determine how fast a production item is moving, which when combined with Big Data analytics can provide meaningful insights.
Regional Application
There are wide applications for this:
- Large firms can monitor how quickly items are produced and where there are blockages to optimise production set-up or offer enhanced training.
- For logistics and supply chain management, RFID’s can help with real-time location and tracking information.
- Sensors for energy inputs can provide necessary data to enable savings on energy consumption.
Cybersecurity Technology
Cybersecurity technology encompasses anything that protects digital systems from internal and external attack. Modern cybersecurity involves technology such as blockchain or artificial intelligence to protect infrastructure and technology such as IoT devices.
Regional Application
This would benefit production processes where digital assets are important, such as:
- Designs in clothing and apparel sector
- Digital creative designs
- Payment systems, especially in the context of international trade of goods.
Additive Manufacturing
This technique involves adding layers of material to create a finished product, and is also known as 3D printing. This contrasts with traditional processes where manufacturing has been based on subtractive methods such as cutting from fabric, removing wood etc.
Regional Application
Applications include:
- Replacing imports of small parts and components with local produced/"printed" alternatives.
- In clothing and apparel sector, shoes and clothing could be manufactured using synthetic materials.
Artificial Intelligence
Artificial intelligence and machine learning allow machines to use algorithms to process data and reach conclusions that were not originally programmed into them. It is used in manufacturing for demand forecasting and predictive maintenance, among other applications.
Regional Application
AI has wide use potential for countries in the region due to relatively large manufacturing sectors and upscaling potential. AI applications can assist in providing more advanced insight and visibility into operations, increased automation of processes, and greater forecasting and prediction capabilities.
Augmented Reality
Augmented reality utilises extra sensory virtual input, usually visual, overlaid onto the actual world.
Regional Application
This has use potential in more advanced manufacturing sectors, allowing physical and virtual information to concurrently exist in the workspace, helping to follow work or assembly instructions, detect defects, or enhance sales and marketing functions.