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ELECTRONICS SECTOR GROWTH IS GREATLY ACCELERATED BY INCREASING CONSUMER SPENDING AROUND THE WORLD
The electronics industry, especially meaning consumer electronics, emerged in the 20th century and has now become a global industry worth billions of dollars. Contemporary society uses all manner of electronic devices built in automated or semi-automated factories operated by the industry. Products are assembled from integrated circuits, principally by photolithography of printed circuit boards.
2011-12 has been marked with global uncertainties and downturn. Growth of Indian economy has also slowed down. But, contrary to these trends, IT-ITeS industry exhibited a resilient growth of 19.2% in production. This growth, however, is mainly driven by software and service industry, in which India is in a dominant position. The hardware segment within IT & Electronics, India remains way behind in electronic manufacturing compared to countries like China, Malaysia, Taiwan, South Korea etc. Countries like China have a share of more than 30% in global exports of electronics products whereas India has a share of less than 1% only. Electronics is today the largest industry in the world but India is not a significant player in this market. We are largely dependent on import of not only critical hardware but also the general use electronic items. The import bill for electronic goods will be bigger than oil import bill by 2020 if a domestic ecosystem for promoting manufacturing is not developed. There is a lot that needs to be done in both services and hardware for sustaining growth and making it inclusive. A 2009 World Bank report found that for every 10 percent increase in high speed internet connections, there is a 1.3 percent increase in economic growth. The impact of ICTs is also seen in its creative and cost-efficient use in basic sectors, such as education, health and agriculture, among others.
The electronics sector produces electronic equipment for industries and consumer electronics products, such as computers, televisions and circuit boards. Electronics sector industries include telecommunications, equipment, electronic components, industrial electronics and consumer electronics. Electronics companies produce electrical equipment, manufacture electrical components and retail these products to make them available for consumers.
The most profitable sector within electronics, the semiconductor industry, has a value of around $248 billion globally. The products produced by this sector are used in a variety of consumer and industrial electronics products. These industries are growing rapidly as a result of increasing demand from emerging market economies. As a result, many countries are increasingly producing more electronics. In 2007, Asia produced 56% of electronic products, with 37% produced in the United States and 22% in Europe. Investment in foreign production of electronics has increased dramatically and resulted in many new factories and factory expansions. Electronics retail is maturing as an industry, becoming increasingly competitive and experiencing unique challenges.
Electronics sector growth is greatly accelerated by increasing consumer spending around the world. As developing economies grow, consumer demand for electronics also increases. Countries that produce electronics now have strong consumer bases that can afford new electronic products. Increased competition is driving the costs associated with electronics production down and expanding the availability of affordable electronics products.
China, long a significant electronics producer, is now a major market for consumer and industrial electronics. Asia's proportion of the market for electronics is expected to represent half the global market within the next several decades. This increase likely means better profitability for the industry at large within the coming years. The supportive role of the electronics sector in providing equipment and components for other industries also supports a significant increase as consumers demand more automobiles, energy-efficient homes and medical technologies.
Electronics retailing is becoming increasingly fragmented and competitive. Many electronics brands are now offering their products at their own stores as a means of becoming more profitable. These stores compete with flagship retailers, such as Best Buy, for customer traffic. Online stores also compete for customer spending and offer products not available in traditional stores. As the variety of electronics products increases, stores struggle to offer enough of the more popular products to consumers and concede some of the market to online retailers.
Volatility in company valuations and in stock values is increasingly becoming normal for electronics retailers as the industry matures and experiences changing pressures. Changes resulting from store closures, mergers and acquisitions, and declining prices are pressuring the electronics sector to become more efficient and more profitable. While purchasing volume increases, many larger companies decline as the sector becomes fragmented with a greater number of companies offering electronic products.
Draft approved by the Cheif Executive Officer of Electronic Sector Skill Council dated on 26th November 2015.
31 Courses were approved by the ESSCI.
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