81% of Manufacturing Industries Yet to Embrace Smartification Solutions

7 Key Recommendations to Ignite New Momentum in Hong Kong Manufacturing HONG KONG SAR - Media OutReach Newswire - 16 September 2024 - Hong Kong Productivity Council New Industrialisation (HKPC New Industrialisation) announces key findings from the "Hong Kong Manufacturing Industries Development Study Report", jointly conducted by Deloitte China at the newly opened Future Manufacturing Hall. The study examines Hong Kong's manufacturing industry, analysing its current state, policies, expert interviews, upgrading projects of Hong Kong-based manufacturers in the Greater Bay Area (GBA), and corporate surveys. Aiming to foster community-wide understanding and jointly explore paths, directions, challenges and opportunities for industry advancement, the HKPC has put forward seven major action proposals to rejuvenate the new momentum of Hong Kong's manufacturing. Overview and Challenges of Hong Kong's Manufacturing Industry With the economic transformation, Hong Kong's manufacturing industry has ostensibly migrated overseas. However, the comprehensive survey results show that the headquarters functions of some local manufacturing enterprises remain in Hong Kong and have transformed into manufacturing services. In accordance with "New Productive Forces", proposed by the country in 2023, Hong Kong must develop high-quality green manufacturing and promote industrial innovation, upgrading, and transformation. Today, the development of Hong Kong's manufacturing industry is generally facing the following four major challenges:

1. Increasingly fierce competition: Fierce competition and saturation of the market has caused the manufacturing industry to face the challenges of declining market share and squeezed profits.
2. Global supply chain remodeling: Supply chain locations are affected by technical requirements, production costs and tariffs, making it more difficult to manage supply chains and companies.
3. Small order volume and customisation have become the new normal: Nearly seven out of ten (69%) of the companies surveyed agree that "lots of variety in fewer quantities" is a new trend in the manufacturing industry, requiring companies to quickly respond to costumers' needs. With customisation challenging traditional production models, Hong Kong can take this trend as an opportunity to develop new manufacturing models.
4. Sustainability is on the move: 67% of the companies surveyed have received or expect to receive requests from customers to incorporate green sustainability standards into their manufacturing processes, making green manufacturing or sustainability an essential issue.

Mr Alvis KONG, Partner of Deloitte China Strategy and Economic Advisory,remarked on the result, "As New Productive Forces has become an intrinsic requirement and an important focus of the country's efforts to promote high-quality development, and developed economies around the world are also laying out national-level industrialisation strategies, a new wave of technological innovation will provide opportunities for the transformation and upgrading of Hong Kong's manufacturing industry. To stimulate industrial innovation and enhance productivity, the HKSAR Government has been actively implementing policies and measures in the areas of finance, manufacturing and R&D, supply chain management, talent, etc., in recent years, with a multi-pronged approach to support the further development of the manufacturing ecosystem." Two New Trends of Customisation and Sustainable Development Unveil Hong Kong's High Value-added Headquarters Functions1) 81% of manufacturing companies surveyed have yet to adopt smartification solutions to cope with the increasing demand for customisation Only 19% of the companies surveyed have already introduced smartification solutions, 20% intend to do so, 8% use other traditional methods (e.g., enhanced publicity), and as many as 53% of companies surveyed said they have no way to deal with it. The data shows that although enterprises generally recognise the importance of customised small batch production, the application of smartification technology is still insufficient in practice. 2) 67% of enterprises have received or expect to receive requests from customers to incorporate green and sustainable development standards into their manufacturing processes Both expert interviews and corporate survey results show that sustainable...