93% manufacturers keen on sustainability standards to boost exports, revenue: PwC survey

Customers are willing to pay more for innovative products

A significant 93 percent of Indian manufacturers intend to prioritise sustainability standards in a move to capture export opportunities and enhance revenue, according to a recent PwC India survey.

The study underscores how embracing Industry 5.0 practices — blending AI with human-centric approaches — could catalyse a 6.42 percent revenue growth over the next two years across the manufacturing sector.

“Industry 5.0’s emphasis on sustainability goes beyond the cost-efficiency focus of Industry 4.0. This marks a paradigm shift where financial and sustainability goals are no longer disparate,” Sudipta Ghosh, partner at PwC India, said. “Our research reveals that 93 percent of CXOs across sectors such as automotive, cement, and textiles are committed to sustainability to unlock market potential in regions like the European Union, where demand for green and ethical products is rising.”

The PwC survey on ‘Decoding the Fifth Industrial Revolution: Marching Towards a Resilient, Sustainable, and Human-Centric Future’ spoke to 180 senior executives from key manufacturing sectors, including chemicals, industrial goods, and metals, from May to July 2024. According to the findings, these manufacturers expect a 2-3x growth in profitability within three to five years by integrating sustainable practices, AI-driven automation, and renewable energy initiatives. Sectors such as chemicals and textiles hope for a revenue growth exceeding 7 percent, driven by export demand and premium pricing for eco-friendly products.

With a focus on symbiotic human-machine collaboration, Industry 5.0 also promotes workforce upskilling and lifelong learning — 52 percent of manufacturers are investing in employee training to transition from repetitive tasks to higher-value work. “The future of work in Industry 5.0 will see employees engaging in more meaningful roles, complementing the capabilities of advanced AI and robotics,” Ghosh explained.

Additionally, the survey reveals an increased focus on real-time data for inventory and supply chain resilience, with over 95 percent of cement and industrial goods sectors investing in inventory optimisation to minimise excess stock and prevent stockouts. PwC also highlighted a growing emphasis on cybersecurity, with 46 percent of manufacturers prioritising protective measures to secure data and IP across increasingly digitalised operations.

Ghosh noted that manufacturers who accelerate Industry 5.0 adoption will not only lead in export markets but also in setting standards for a sustainable, resilient future. "This is the transformative power of Industry 5.0," he added, "driving responsible growth while securing a competitive edge in a globalised, sustainability-focused market."

End of low-skilled jobs?

With Industry 5.0 reshaping the landscape of manufacturing, nearly 52 percent of executives are prioritising investments in automation for repetitive and mundane tasks to allow employees to focus on high-value work. The transition is expected to move away from low-end, low-skilled jobs towards roles that require critical thinking and creativity.

"The nature of work will shift from mundane tasks to value-added ones. Low-end and low-skilled jobs will disappear, and they should," Ghosh said. Concurrently, investments in lifelong learning are being made to upskill employees, fostering a workforce capable of leveraging technology and contributing to innovative, strategic growth.

Sectoral findings

Premium demand for innovation and sustainability in automotive, metals, and textiles: Customers are willing to pay more for innovative products, especially in automotive and metals, while textiles see a surge in demand for sustainable options.

Real-time inventory tracking a priority for cement and industrial goods: Over 95 percent in these sectors are investing in real-time systems to optimise stock levels and reduce inventory issues.

Renewable energy and waste reduction practices see increased investment: More than half of the surveyed executives are prioritising energy efficiency, waste reduction, and water management.

Cybersecurity investments grow amid digital transformation: Around 46 percent of companies enhance cybersecurity measures to protect systems, data, and IP as digital transformation advances. About 50 percent are channeling investments into real-time data and analytics to create resilient, disruption-proof supply chains.

Sustainability and emloyment drive for automotive and chemicals: Over 80 percent of executives believe sustainability will enhance brand perception and attract a socially conscious workforce.