Technology investment by manufacturing industries could increase, according to CII report

NEW DELHI: Manufacturing industries are likely to increase investment in technology integration to 11-15% of their total budgets (up from 10% previously) over the next two years, according to a report by the Confederation of Indian Industry (CII).

The report, titled ‘Smart Manufacturing: Unleashing India’s Potential’, says this increased investment is likely to go into the Internet of Things (IoT), robotics and big data.

Despite the service industry driving growth in India’s economic output, the manufacturing industry’s share of gross domestic profit (GDP) has remained flat at around 13-17% in recent years. , this can be important.

According to the report, capital-intensive industries such as semiconductors, aerospace, and automotive are at the forefront of adopting these technologies, while traditional industries such as textiles and food processing are gradually transitioning to digitalization. That’s what it means.

According to the Annual Industrial Survey (ASI) data released in September this year, the number of manufacturing employment in fiscal 2023 was approximately 18.4 million, an increase of approximately 7.5% from 17.2 million in fiscal 2022.

The report shows that across major manufacturing sectors, fewer than one-third of companies benefit from integrated information technology (IT) connections built between subsystems, and there is room for improvement. It also showed that there is.

IT connectivity integration

Approximately 20% of companies surveyed have little or no IT connectivity integration in place, the report notes.

“Few companies with highly integrated IT systems benefit from seamless connections between subsystems that enable real-time data analysis and support agile decision-making. 30%. This suggests that there is significant room for improvement, especially for the 20% of companies with limited or limited capabilities,” the CII report said. Masu.

From an extensive survey across the Indian manufacturing industry, CII finds that most Indian companies are moving towards digitization and technology adoption as the adoption of automation tools and artificial intelligence (AI) increases across the world. pointed out.

Although many companies, especially in sectors such as capital goods, chemicals, electronics, and steel, are investing in technology and engaging in digitization, CII observed disparities across these sectors.

For example, in the electronics sector, many companies have a clear strategy and are actively working on technology integration, whereas in the automotive sector, many companies range from having no strategy at all to having a very enthusiastic and clear strategy. There is a wide variety of companies. said the CII in its report.

According to the CII report, this is due to the differences in business size and market segments observed in the automotive sector.

The capital goods sector is ramping up its adoption of technology, with many companies having clear roadmaps for technology investments or in the process of developing such investment plans. “Large companies are likely to be leading the way, but small and medium-sized enterprises are also catching up,” the CII report said.

The report says manufacturing challenges remain, including high costs, uncertain returns on investment, and legacy system integration, especially for small and medium-sized enterprises (SMEs). Additionally, the report highlights the urgent need to upskill the workforce to close the skills gap and enable seamless adoption of advanced technologies.

In its report, the CII calls for more public-private partnerships to establish shared technology hubs, stronger industry-academia collaboration, and increased budget allocation for technology, as well as encouraging widespread adoption of smart manufacturing. It recommended the implementation of support policies for this purpose.