Dr. Seyed Mohsen Tabatabaei Mozdabadi; Affiliated Faculty Member, Islamic Azad University

According to Tasnim News Agency, in a situation where the global economy is facing numerous challenges, including inflation, supply chain disruptions, and market fluctuations, investment in the manufacturing sector is considered one of the key solutions to create stability and economic growth. Manufacturing not only helps create jobs and reduce unemployment, but also paves the way for competitiveness in global markets by increasing value added and developing new technologies.

According to the World Bank (2022), countries with less than 15% of their gross domestic product (GDP) invested in the manufacturing sector usually have lower economic growth than countries with more than 25% of their GDP.

According to statistical data and economic reports, below are some countries where attention has been paid to investment in production and its consequences:

Venezuela

Investment in production: less than 5% (five) of GDP (2021), sharp decline in GDP by more than 75% (seventy-five) from 2013 to 2021, unemployment rate above 40% in 2021, sharp decline in oil production (oil production and processing) due to lack of investment, increasing poverty and inequality; more than 90% of the population lives below the poverty line.

Zimbabwe

Investment in manufacturing: about 8% (eight) less than GDP (2020), very high inflation, annual inflation rate of more than 500% (five hundred) in 2020, decline in agricultural and industrial production due to lack of investment and inputs, unemployment rate of about 25% (twenty-five) and widespread labor migration.

Haiti

Investment in manufacturing: less than 10% (ten) GDP (2021), negative economic growth in recent years, heavy dependence on imports due to weak domestic production sector, unemployment rate above 40% and increased food insecurity.

In contrast, countries where investment in manufacturing has been high and its positive consequences can be mentioned. Such as:

China

Investment in manufacturing: China, as the world's largest manufacturing country, has invested more than $2.8 trillion in the manufacturing sector in 2022.

Economic Growth: China’s economic growth rate in 2022 was about 5.2%, largely driven by the development of advanced industries such as electronics, electric vehicles, and renewable energy.

Job Creation: These investments have led to the creation of more than 100 million jobs in various manufacturing sectors.

Technology: China has become a global leader in fields such as artificial intelligence, robotics, and green technologies.

Germany

Manufacturing Investment: Germany invested about $700 billion in manufacturing in 2022.

Key Industries: Automotive (especially electric vehicles), industrial machinery, and advanced technologies

Exports: Germany has become the world’s second largest exporter by investing in manufacturing, with exports reaching $1.5 trillion in 2022.

Environmental developments: Germany has achieved a 40% reduction in its greenhouse gas emissions compared to 1990 by investing in renewable energy production.

India

Manufacturing investment: India invested about $320 billion in manufacturing in 2022.

"Make in India" program: This program has attracted foreign and domestic investment in industries such as electronics, textiles and automobiles.

Economic growth: India's economic growth rate in 2022 was about 6.8%, partly due to the development of manufacturing industries.

Job creation: More than 50 million new jobs have been created in the manufacturing sector.

Vietnam

Manufacturing investment: Vietnam invested about $100 billion in manufacturing in 2022.

Foreign investment: Vietnam has become a major destination for multinational companies such as Samsung and Intel.

Export Growth: Vietnam’s export value reached $368 billion in 2022, up 10% from the previous year.

Job Creation: More than 15 million jobs have been created in the manufacturing sector.

Investment in the manufacturing sector can, as a long-term strategy, reduce the economy’s dependence on imports and pave the way for self-sufficiency and sustainable development by strengthening domestic infrastructure. This is especially important as countries seek to reduce dependence on foreign resources and increase economic resilience.

The benefits of investing in manufacturing include:

Job Creation: The manufacturing sector, especially in small and medium-sized industries, creates many job opportunities and helps reduce unemployment.

Increased Exports: By improving the quality and quantity of domestic products, it is possible to compete in global markets and increase the country’s foreign exchange earnings.

Technological development: Investment in manufacturing is usually accompanied by the transfer of new technologies, which leads to upgrading the industry and increasing productivity.

Reducing import dependence: By strengthening domestic production, dependence on imported goods is reduced and the country's economic security is improved.

In addition, investment in manufacturing can lead to the development of green and sustainable technologies. Given the increasing concerns about climate change and the need to reduce greenhouse gas emissions, manufacturing based on clean technologies and renewable energies can play an important role in achieving the Sustainable Development Goals.

In this regard, government support through financial facilities, reducing trade barriers, and creating appropriate legal frameworks to attract domestic and foreign investors is essential. Also, cooperation between the private and public sectors can help accelerate the process of industrial development and increase productivity in the manufacturing sector.

Finally, investment in manufacturing is considered not only as an economic necessity, but also as a strategic solution to create economic security and increase social welfare, improve the quality of life, reduce dependence on imports, and strengthen the country's position. Given the rapid developments in technology and structural changes in the global economy, investment in this sector can act as a key factor in achieving sustainable growth and international competitiveness.

Tasnim News Agency