May 16, 2020

Capgemini: Smart factories could add $1.5trn to global economy

capgemini
Smart Factory
IoT
AI
Jonathan Dyble
2 min
Smart factories
In its latest report, multinational consultancy firm Capgemini predicts that smart factories are set to become revolutionary within the manufacturing in...

In its latest report, multinational consultancy firm Capgemini predicts that smart factories are set to become revolutionary within the manufacturing industry.

The report found that smart factories could add anywhere between $500bn to $1.5trn in value to the global economy over the next five years, as firms increasingly look to digitise their operations in order to stay ahead of the game.

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“Manufacturing under Industry 4.0 has access to digital technologies such as the Internet-of-Things, Big Data Analytics, Artificial Intelligence, Advanced Robotics, 3D printing, and Cloud Computing that have opened the door to incredible gains for early adopters,” Capgemini stated.

Currently, only 6% of manufacturers can be classified as ‘digital masters’. This, combined with the fact that as many as 76% of manufacturers currently have a smart factory initiative whilst only 14% of these are satisfied, suggests that the market for smart factories is set to explode within the next decade.

Business expectations are also likely to act as a driving factor, with manufacturers expecting on-time-delivery to accelerate by 13 times compared to 1990.

The potential benefits that would be available to businesses are countless, with the likes of IoT, big data analytics, AI, robotics, 3D printing and cloud-based computing services all paving the way for success.

Key sectors where manufacturers are already harnessing the potential of smart factories include industrial manufacturing, automotive, consumer goods, energy & utilities, aerospace & defence and the pharma, biotech and life science industries.

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Jun 8, 2021

IMF: Variants Can Still Hurt Manufacturing Recovery

IMF
Manufacturing
COVID19
Musk
Elise Leise
3 min
The International Monetary Fund (IMF) claims that while markets are rising and manufacturing is coming back, it’ll push for global immunisation

After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022

Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery. 

Lingering Concerns Over COVID

Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high. 

Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery? 

IMF: Current Boom Could Falter

Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”. 

Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”. 

Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.

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