The Indian miracle state pointing the way to global sustainability

Manufacturing and production activities have long been the drivers of economic growth and prosperity for economies across the globe. They provide an institutional foundation for the advancement of productivity, competitiveness, skills and innovation. Production systems trigger a multitude of social and environmental externalities, both positive and negative. A strong manufacturing base is crucial for nations to sustain economic growth, generate jobs and ameliorate social problems (particularly relating to poverty).

Production activities are also significant drivers of resource use, relying on natural assets such as fuel, metals, minerals, biomass, land and water. The global industrial sector consumes about 54% of the world’s energy, and humanity’s material resource use is expected to more than double between 2015 and 2050, according to the UN, while the US Environmental Protection Agency estimates that a fifth of global greenhouse gas emissions can be attributed to industrial activity.

This tremendous potential negative impact, however, also means that improvements within the production sectors may also yield hugely positive results. According to the UN’s high-level political forum on sustainable development, achieving sustainable consumption and production will not only deliver Sustainable Development Goal 12 (“Ensure sustainable consumption and production patterns”) but also contribute significantly to the achievement of the other SDGs.

Transforming traditional production systems into sustainable ones requires manufacturers to find innovative ways to create products, so as to minimize the environmental impact of production activities through the efficient use of natural resources, conservation of energy and a reduction in waste and hazardous emissions. To do this at a global level also requires a collaborative approach, with multi-stakeholder partnerships across national, regional and local governance bodies, businesses, civil society, international organizations and research and academic institutions.

The advent of advanced technological transformations in the Fourth Industrial Revolution has made it easier to transition to more sustainable production systems. Technologies such as short-loop recycling encourage manufacturers to recover and reuse materials, while a cobotic system of manufacturing – which entails collaborations between humans and robots to perform tasks – can offer higher productivity and simultaneously protect humans from dangerous tasks. Manufacturers can now significantly reduce their consumption of virgin materials through advances such as autonomous disassembly while augmented workforce provides a cost-effective solution to addressing the skill gap and improving worker productivity in the manufacturing sector.

The World Economic Forum’s Accelerating Sustainable Production project attempts to facilitate the transformation of global production systems in order for them to attain increased productivity while being able to deliver on sustainability and environmental preservation. The project aims to leverage production as a tool for meeting the UN SDGs. By launching an inquiry into the anticipated impacts of the 4IR on production systems and their sustainability, the project provides a platform for leaders across sectors and industries to ensure the future of production is based on inclusive and sustainable growth.

In its first report, “Driving the Future of Production Systems with Fourth Industrial Revolution Innovation”, the project developed a framework to quantify the value creation potential of 40 disruptive technologies on society, environment and economy, and mapped it onto the UN SDGs. But owing to vast divergence in historical, physical and legislative factors, it is also necessary to account for the myriad contextual differences in different regions to help nations respond effectively to technological change and ensure the sustainability of their production systems.

The Forum’s Readiness for the Future of Production Assessment, a diagnostic tool to assess the capability of countries to incorporate emerging technologies into production processes and value chains, further underscores the need to consider local factors and context in order to generate insights on how different countries are positioned to benefit from and shape the changing nature of production. Building on the project’s first phase, the ongoing second phase focuses on strengthening regional perspectives on the potential of scalable innovations to drive sustainability of production systems, through in-depth analyses as well as collaborations with local stakeholders.

The diverse manufacturing sector in India bolsters the nation’s economy through its strong links to other industry sectors. Manufacturing is a major contributor to the country’s GDP and generates significant employment opportunities for its large young workforce. Aided by the Indian government’s “Make in India” initiative, which attempts to enhance the GDP contribution of manufacturing from the current 17% to 25% by 2022, the sector is likely to emerge as a key growth engine for India. It has the potential to serve as the cornerstone for the nation to fulfil its aim of emerging as a global economic power.

Within India, the state of Andhra Pradesh has been a growth miracle. As one of the fastest developing regions in the country, it has been able to sustain a double digit inclusive growth rate of around 12% over the past decade, and has consistently ranked as the top state for ease of doing business. Andhra Pradesh’s government is aiming for it to become a developed state by 2029 and the best investment destination in the world by 2050. The state’s economic performance and potential triggered the launch of the second phase of the Accelerating Sustainable Production project in the state.

The Accelerating Sustainable Production in Andhra Pradesh project entails an in-depth analysis of the potential of selected 4IR technologies for enhancing the competitiveness of the state and its resident companies. Launched in partnership with the state government and the Andhra Pradesh Economic Development Board, this study centres on the electronics and automotive sectors, which feature among the 12 government industrial growth focus sectors. The assessment study has identified six 4IR technologies which cumulatively present a sustainable value opportunity, totalling $5 billion annually by 2022 for the two sectors combined.

According to the findings of the study, for the automotive sector these technologies include augmented workforce, cobotics and bio-based plastics, while for the electronics sector they comprise 3D printing, digital traceability and advanced electronic design automation. The technologies have been shortlisted based on consultations with selected local and international companies in the sectors, as well as senior state government officials. The prioritization framework for the study accounts not only for the potential of the technologies to drive the most sustainable and scalable impact, but also their capacity to address the needs of the local industry and assist in the realization of the government’s vision for the state’s industrial development.

The study surmises that, supported by effective and forward-looking industry and policy initiatives, Andhra Pradesh provides favourable conditions for the adoption of advanced technologies in order to accelerate growth and development in the state. Meanwhile, measures such as augmented technological infrastructure and greater technological access for the industry and investments in smart skilling and upskilling programmes to skill the new talent pool for the future of manufacturing will be crucial for the state to maximize the impact of emerging technologies, maintain its growth momentum and realize the full potential of its production systems.

The state can further ensure a sustainable competitive advantage through the adoption of a strategic collaborative framework that leverages the capabilities of the government, businesses and academics to create production systems of the future. The study attempts to highlight the impact of local action in triggering global system change, as well as facilitate public-private dialogue and collaborations to accelerate the transition towards production systems that are more competitive and sustainable.

For more, read our report, Accelerating Sustainable Production.