Amitabh Kant: To counter China’s cost competitiveness, countries have to look at new areas of technology: Kant at WEF 2022

The pandemic took a hit at the manufacturing and production sectors across the globe causing the great supply chain disruption. Countries and companies across the world are now looking to strengthen their production systems. Amitabh Kant, CEO, Niti Aayog says that for countries to become centers of manufacturing, they will have to become highly competitive and improve their logistics massively.
“There’s a massive shortage of skills across the world- product developers, artificial intelligence engineers, machine learning scientists and a whole range of new emerging areas of growth which are going to make the world far more productive,” he said speaking at World Economic Forum 2022.
He is sure that global supply chains are going to be totally reconfigured post pandemic and geopolitics will ensure that.

“The Russia-Ukraine conflict has demonstrated that war can be fought with other means and therefore, global supply chains will get massively redistributed,” he said.
He added that the post-pandemic era is going to technologically leapfrog in many ways and across a whole range of areas.
“Whether it’s advanced chemistry cell, electronic manufacturing, you’ll see a huge amount of technology-level jumping. But this will require a huge amount of skilling in alternative destinations. That would really mean that education systems will need to be reconfigured entirely. Existing institutes of technology will have to completely restructure themselves for the emerging world of tomorrow,” he said.
It is, therefore, very important to understand that many companies and countries wanting to grow and expand need to look at what are going to be the emerging technologies of the world in the next four to five years, he said.
“You can’t penetrate the world with existing technologies. China’s already captured size and scale in whatever you produce. You will never be able to match the cost competitiveness in that. So, you will have to look at completely new areas of technology. And in those areas, you will be required to build completely new skills,” he said.
Mentioning a slightly contrary thought to this, Frans van Houten, CEO, Royal Phillips Electronics, said that while it is a nice vision, there is still going to be some interdependence across the globe.
“I don’t believe in a complete lack of globalization. You can make something in two or three places in the world, but not everywhere. There will be a lot of innovation coming, acknowledged. But even then, there will be a level of interdependence,” he said.
He added that in the coming years, we will have a renewed appreciation of the operations leader because we will need all these strategies that take new manufacturing techniques into account.
“The whole dual sourcing multiple locations, therefore the job of the chief of operations has just become a whole lot more complex and innovative which historically was for R&D,” he said.
He added that the supply chain will have to be more balanced geographically, and cannot only be in China. Therefore, we’ll have to do dual sourcing, so that we are not designed into a single chip maker.
“But all that redundancy that you want to have will cost money. Next question is, are people prepared to pay for that? I don’t think so. Which means that we will have to fight efficiency. That coupled with a potential shortage of labor as we are experiencing right now. I think we will see an acceleration of robotics, additive manufacturing,” he said.
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