ARTICLE
24 July 2024

Investing In Manufacturing

Nexdigm UAE

Contributor

Professional Services that help companies navigate challenges across all stages of their life-cycle. Through our direct operations in the USA, Poland, UAE, and India, we serve a diverse range of clients, spanning multinationals, listed companies, privately-owned companies, and family-owned businesses from over 50 countries. Nexdigm is an employee-owned, privately held, independent global organization that helps companies across geographies meet the needs of a dynamic business environment. Our focus on problem-solving, supported by our multifunctional expertise enables us to provide customized solutions for our clients.
Top Investment Destinations in Asia
United Arab Emirates Strategy

Top Investment Destinations in Asia

Global markets today are becoming more interconnected with liberalized trade policies, growing access across countries, and increasing bilateral agreements, led by technological revolution and digitization. While manufacturing grew at a rapid pace in the United States, Europe, and Japan after World War II, multinationals started moving their large-scale manufacturing processes to China in the late 20th century.

Businesses are more interdependent on each other than ever before. While the concentration of bulk manufacturing processes in certain geographies has allowed economies of scale and facilitated robust supply chains, they have been subject to heavy changes, which were further accelerated by the pandemic. Several crises including geo-political conflicts, international trade tensions, continuing effects of the pandemic, etc. have urged companies to diversify and minimize their risks by assessing alternative manufacturing destinations.

South Asia has emerged as a preferred alternative for foreign direct investment. Emerging countries such as India, Thailand, Malaysia, Vietnam, etc., have considerable opportunities to provide solutions to fill the gap. In recent times, these economies have picked up the baton and have provided advantages to address manufacturing concerns in the areas of cost competitiveness, domestic market absorption, large labor, talent availability, etc. to the international business community.

With this backdrop, it would be interesting to assess these new potential manufacturing destinations. In this document, we assess nine South Asian countries through a relative comparison of various parameters from a business standpoint.

Comparative Analysis

We have selected six critical factors for comparison across China, India, Indonesia, Malaysia, Philippines, South Korea, Taiwan, Thailand and Vietnam.

Within these parameters, we have included certain sub-parameters with percentage weights and used them to develop competitiveness scores for each country.

Note: The information/data used in the comparative analysis described above is gathered from various global data sources, country-specific websites, primary surveys, etc. A detailed comparison can be multi-dimensional with several different factors or variables at play. To keep this exercise concise and targeted, we have limited the search for a relative comparison to these parameters of the selected countries.

Evaluation Result

In our evaluation, Thailand, India, and Malaysia emerged as the top alternative manufacturing hubs, followed by South Korea. All these economies offer relatively higher or better advantages in comparison to other selected countries. They have also witnessed a significant jump in Ease of Doing Business rankings in recent years and continue to better their policies, facilitate conducive business environments, support businesses through changes in rules and regulations, etc., to bolster international investments in their respective countries.

The data and information used for rankings and analysis have been sourced from various sources including the World Bank, International Labor Organization, etc. Such data, and information is obtained from reports, publications, etc. over the past five years, updated in line with current trends and international news to the extent possible on best effort basis.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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