Hail manufacturing; but hello innovating!

Ehtesham Shahid
Ehtesham Shahid
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For once, bad news emerging out of China could turn out to be good news for the rest of the world. The Asian giant’s famed manufacturing sector, which had propelled the global economy for months, if not years, returned its weakest data since 2012. It had an immediate impact on the local and international markets, commodity prices and triggered turmoil elsewhere in the developed world.

China’s official position vis-à-vis the general slowdown, which began last year, is that their economy is entering a phase of a “new normal” and that they are undertaking reforms to maintain sustainable growth. This is also being seen as a shift from the country’s export-driven manufacturing to services and domestic consumption. It is this shift that the rest of the world needs to comprehend and respond to.

Some analysts believe that the world has hit a global manufacturing recession, which will eventually impact other sectors. Whether we see this in the light of these recent developments, the fact remains that the scale at which China has manufactured in recent years there was bound to be a consumption glitch at some stage. So, in a way, this is a blessing in disguise as things have not gone out of hand yet.

The scale at which China has manufactured in recent years there was bound to be a consumption glitch at some stage

Ehtesham Shahid

Like it or not, Chinese manufactured products have been a great leveler over the years. They have come in all shapes and sizes, at all price points and, more importantly, at different levels of quality. Consumers in the developed and developing countries have for several years benefited from these products. At the same time, governments and industries have been jittery over small-scale units closing down and at the least their productivity being hampered.

Whichever way one looks at it, this flow of goods has gone on for too long and had to change at some stage, irrespective of whether we complain about the quality of these products or their sheer scale.

Time to innovate?

Manufacturing will remain relevant to us going forward even as we move rapidly toward what World Economic Forum Founder, Klaus Schwab, calls “The Fourth Industrial Revolution”. He believes we stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. There is evidence to suggest this is already beginning to happen.

However, what this turnaround in China teaches us is the urgent need to address the basic questions related to manufacturing – in China and elsewhere – before any product acquires industrial scale. Do we really need this product? At what scale should it be manufactured? How can it be made more environment-friendly? Where will it generate most employment?

The answers to most of these questions lie in innovation, and at a global level. As the Global Innovation Index 2015 puts it, the focus should be on maximizing innovation in all industries.

Innovation should not just be about enhancing efficiency, improving productivity and building sustainability. It should also be about making better choices available, neutralizing the culture of consumerism that has engulfed our lives, and focusing on products and services that make valuable contributions to societies around the world.

The true benefit of innovation is its complete neutrality. An innovation can take place in any part of the world and yet get embraced in a totally different culture; it improve the cog in the wheel of any industry and benefit any segment of the society. Sadly, it hasn’t not quite been the same with manufacturing, even services.

This also shouldn’t, however, suggest the demise of the manufacturing sector in China. Far from it. Despite all the setbacks, China is still likely to remain one of the biggest drivers of global growth and manufacturing will remain a major component of its economy.

So let us hail the manufacturing sector for all it has achieved over the years, but start innovating before we manufacture. That appears to be the smarter way forward.

Ehtesham Shahid is Managing Editor at Al Arabiya English. For close to two decades he has worked as editor, correspondent, and business writer for leading publications, news wires and research organizations in India and the Gulf region. He loves to occasionally dabble with teaching and is collecting material for a book on unique tales of rural conflict and transformation from around the world. His twitter handle is @e2sham.

Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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