The European manufacturing industry is facing increasing competition on two main fronts.  In the high technology sector, where productivity and innovation are key, Europe faces increasing competition from developed countries such as the US and Japan. For products where cost competition predominates, manufacturing jobs are gradually being eroded and moving to low wage economies that are able to produce lower cost products.

Not only is Europe under utilising ICT in its manufacturing sectors, but also spends less on research and development (R&D) than it's leading major competitors (US and Japan) who spend 30% of their research effort on ICT in contrast to Europe’s 18%. More concerning is that Europe’s per capita expenditure on ICT research will soon be surpassed by China and Korea; low wage economies with an aspiration to compete in high technology added value products and services.

Much work has already been done to identify which areas of ICT will have the most impact on the future of manufacturing.   The conclusions of the ManVis study clearly states that ICT is a key cross cutting technology and that it is a fundamental foundation for improved competitiveness in the manufacturing industry.        

The final report suggests that competition from low wage economies will prevail in the foreseeable future. ICT can, however, minimise the inevitable decline of European manufacturing by cost reduction technologies such as automation and enhanced labour productivity.

High technology manufacturing will be based on the efficient use of sophisticated manufacturing technologies, such a nano-technologies, smart materials and highly automated operations. These will be dependent on close links with the science base. It is predicted, however, that such activity will increase productivity at the expense of employment and, at best, only maintain current employment levels in high technology manufacturing.   

More strategic opportunities lie in the development and implementation of new business models and manufacturing paradigms. For example:

Local Manufacturing Operations and Local R&D to Address Local User Needs
Based on sustainability and societal issues, this concept aims to minimise transportation of material and people by having small manufacturing units close to the potential users, and which will also allow new models of high value added services to be delivered. This will potentially involve centralised design and administrative functions with integrated vertical and horizontal supply chains; possibly even the integration of competitive supply chains.    Knowledge sharing will be critical to the success of this model and ICT will be required to support such knowledge intensive operations, allow end-users access to the design process and to facilitate post sales servicing.

Eco-Sustainable Manufacturing
Societal attitude and environmental legislation may drive a manufacturing model based on eco-sustainability. This will involve new products that are designed to maximise life cycle sustainability, new materials that are eco-friendly, energy efficient manufacturing / product usage and minimised transportation throughout the supply chain.   ICT areas such as tagging and traceability coupled with complex customer interaction databases will be essential for such a model to be successful.