In this article, we will look at the 20 most industrialized countries in Asia. You can skip our detailed discussion and see the 5 Most Industrialized Countries in Asia here.
Current State of Development and Outlook of Asia
Asia has observed phenomenal growth in industrialization and manufacturing, particularly in the first quarter of 2024, driven by strong domestic demand and export growth in electronics. Developing Asia’s growth forecast for 2024 is revised up to 5.0% which also speaks volumes about the highly stable performances across multiple sectors. Countries like China, with its recovery in services consumption and strong exports, have played a key role in this growth. Moreover, the strong performance of sectors like construction and public investment in countries like Azerbaijan and the Kyrgyz Republic has further fueled this expansion.
The region’s inflation is also on a positive trajectory and is forecasted to ease from 3.3% in 2023 to 2.9% in 2024 and will stabilize at 3.0% in 2025. This decline is attributed to stable exchange rates and tight monetary policies in key economies. For example, Kazakhstan’s inflation rate slowed from 18.5% in early 2023 to 9.0% in the same period of 2024. Similarly, Armenia experienced a 0.8% deflation in early 2024. Despite the positive outlook, the region faces several downside risks, including geopolitical tensions and property market fragility in China.
Speaking of China, it is worth highlighting that it is Asia’s most powerful economy in 2024. Beyond Asia, South Africa and Morocco are the most industrialized countries in Africa.
SEE ALSO 15 Most Powerful Asian Countries in 2024
Performance of Manufacturing in Asia in 2024 and the Growing Importance of South Asia
Asia’s manufacturing sector continues to exhibit strong performance as the Purchasing Managers’ Index (PMI) exceeded 50 for seven consecutive months. This consistent growth confirms a resilient industrial base across the region. For instance, China’s PMI for June stood at 51.2, while Japan’s reached 52.4. Moreover, Southeast Asian economies are also contributing largely to this growth. Vietnam’s PMI hit 53.1 and similarly, Thailand and Indonesia reported PMIs of 52.7 and 51.8, respectively. The region’s manufacturers are capitalizing on technological advancements and increased foreign investment.
Southeast Asia has become a key hub for businesses diversifying supply chains which is truly driven by the “China Plus One” strategy. With the growing US-China tensions, companies are shifting operations to the region to mitigate risks associated with heavy reliance on China. This strategy has largely boosted foreign direct investment (FDI) into ASEAN countries, with FDI rising to $236 billion in 2023, up from an annual average of $190 billion between 2020 and 2022. Countries like Vietnam and Indonesia are benefiting the most from this shift.
Hence, Vietnam has appeared as an integral manufacturing location, especially for tech giants like Apple Inc (NASDAQ:AAPL), which now assembles MacBooks, iPads, and Apple Watches in the country. Vietnam’s competitive labor costs and extensive free-trade agreements have made it a preferred destination for supply chains. In addition to Apple Inc (NASDAQ:AAPL), Samsung has established a major research and development presence in Vietnam.
Moreover, Malaysia and Indonesia are also seeing tremendous growth. Malaysia, with its skilled labour force in semiconductor manufacturing, has attracted investments from companies like Intel and GlobalFoundries. Meanwhile, Indonesia is capitalizing on its abundant resources of copper, nickel, cobalt, and bauxite to develop an integrated electric vehicle (EV) hub.
Tech Industry Giants Tapping Into Asian Economies
NVIDIA Corp (NASDAQ:NVDA) is expanding its presence in Asia with major investments in Indonesia and Singapore. In April 2024, NVIDIA Corp (NASDAQ:NVDA) announced plans to build a $200 million artificial intelligence center in Surakarta, Indonesia in partnership with Indosat Ooredoo Hutchison. This facility aims to enhance local telecommunications infrastructure and develop digital talent. The initiative follows Indosat’s integration of NVIDIA Corp (NASDAQ:NVDA) next-generation chip architecture, Blackwell.
In Southeast Asia, NVIDIA Corp (NASDAQ:NVDA)’s partnership with Singapore’s telecom provider Singtel further confirms its regional ambitions. By deploying AI capabilities in data centers across the region, Singtel aims to provide businesses access to NVIDIA Corp (NASDAQ:NVDA)’s cutting-edge AI computing power without the need for heavy infrastructure investments. Southeast Asia has indeed emerged as a major revenue driver for NVIDIA Corp (NASDAQ:NVDA).
On the other hand, Intel Corp (NASDAQ:INTC) is making a strategic investment to automate chip packaging with the involvement of 14 Japanese companies, as reported by Nikkei Asia. Led by Intel Corp (NASDAQ:INTC) Japan president Kunimasa Suzuki, this collaboration aims to develop a working prototype by 2028. The US chipmaker plans to invest tens of billions of yen in this initiative by capitalizing on Japan’s substantial 30% share in global chipmaking equipment. By advancing front-end processes like circuit formation, Intel Corp (NASDAQ:INTC) seeks to enhance back-end applications, such as chip stacking, to boost overall chip performance. This decision is made to reduce reliance on manual assembly in low-cost regions and shift manufacturing to the US and Japan. The effort is timely, as China currently holds over a third of global back-end chipmaking capacity.
At Insider Monkey, we delve into a variety of topics, however, our expertise lies in identifying the top-performing stocks. Currently, Artificial Intelligence (AI) technology stands out as one of the most promising fields. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Also, see Top 18 Automotive Industry Innovations and Trends and 20 Largest Publicly Traded Industrial Companies In The US.
A busy cityscape of financial buildings, emphasizing the importance of the industry for the economy.
Our Methodology
To identify the most industrialized countries in Asia, we used two key metrics: the value-added manufacturing output (in current dollars) and employment in industry (percentage of total employment). We chose the value-added manufacturing metric as it measures the contribution of manufacturing to the overall economy, and a higher value indicates a stronger and more developed manufacturing sector, which is a core component of industrialization. We chose the employment metric because it represents the proportion of the workforce employed in industrial sectors. It provides insights into the labor market structure and the importance of industrial activities in the employment landscape. A higher percentage indicates a larger industrial workforce, suggesting a more industrialized economy.
We ranked each country from highest to lowest for both metrics, with a rank of 1 indicating the highest manufacturing output or highest employment in industry. To determine the overall level of industrialization, we assigned a weight of 0.8 to the manufacturing output rank and 0.2 to the employment in the industry rank. We then calculated a weighted average rank for each country. The countries are presented in ascending order of their weighted average rank, where 1 indicates the highest level of industrialization and 17 the lowest.
Please note that there are three transcontinental countries on the list i.e., Egypt, Turkey and Russia.
20. Qatar
Manufacturing (Output) Rank: 21
Employment % by Industry Rank: 2
Weighted Average Rank: 17
Qatar has aimed to diversify its economy through industrialization, with the manufacturing sector predominantly consisting of large firms with mixed state and foreign private ownership. For instance, the Qatar Petrochemical Company is primarily owned by a government holding company, while a French firm holds a minor stake. As of 2022, Qatar is also considered one of the wealthiest Asian countries by GDP per Capita metric which stands at $121,124.
19. Israel
Manufacturing (Output) Rank: 17
Employment % by Industry Rank: 34
Weighted Average Rank: 17
Israel is one of the top 10 most developed countries in Asia. The high level of industrialization comes from its advanced high-technology sector, with over 400 multinational corporations, including Intel, Microsoft Corp (NASDAQ:MSFT), and Apple Inc (NASDAQ:AAPL). It is also one of the countries with the largest number of startups and NASDAQ-listed companies. The industrial manufacturing sector, particularly the diamond industry contributed about 21.9% of exports in 2017.
18. Pakistan
Manufacturing (Output) Rank: 19
Employment % by Industry Rank: 15
Weighted Average Rank: 16.7
In 2023, the value-added manufacturing output of Pakistan was $45,935.61, making it one of the top 20 most industrialized countries in Asia. Moreover, in 2022, the country had 26% of its total workforce employed in the industrial sector.
17. United Arab Emirates
Manufacturing (Output) Rank: 18
Employment % by Industry Rank: 7
Weighted Average Rank: 15.1
While Dubai is generally considered the business and industrial hub of UAE, the industrial sector in Abu Dhabi has also been observing incredible growth, with its contribution to GDP increasing by 9.7% to 90.8 billion dirhams ($24.72 billion) in the past year, accounting for 16.4% of non-oil GDP and over 8% of total GDP. The government aims to double this contribution by 2031.
16. Philippines
Manufacturing (Output) Rank: 15
Employment % by Industry Rank: 28
Weighted Average Rank: 14.8
Manufacturing in the Philippines contributed about around 19% to its GDP in 2022. Moreover, the sector, which includes the electronics and automotive industries, grew by 6.3% in 2023 and employed about 7% of the labor force.
15. Singapore
Manufacturing (Output) Rank: 13
Employment % by Industry Rank: 38
Weighted Average Rank: 14.2
Singapore is often considered the most technically advanced country in Asia. It is a global leader in technological development as it ranked 3rd in the 2021 Bloomberg Innovation Index for manufacturing value-addition. With its highly skilled workforce, it ranked 2nd in the 2022 Global Talent Competitiveness Index, and with strong R&D investments, it is the 5th largest exporter of high-tech goods worldwide.
14. Egypt
Manufacturing (Output) Rank: 16
Employment % by Industry Rank: 8
Weighted Average Rank: 13.6
In 2023, the value-added manufacturing output of Egypt was $59,641, making it one of the most industrialized countries in Asia. Moreover, in 2022, the country had 28% of its total workforce employed in the industrial sector.
13. Iran
Manufacturing (Output) Rank: 14
Employment % by Industry Rank: 4
Weighted Average Rank: 11.6
Iran’s industrialization has faced major challenges due to sanctions. Despite a sharp economic contraction post-2012 and 2018 sanctions, Iran’s manufacturing sector showed resilience. From 2002 to 2012, industrial production growth averaged 13% annually but plummeted to below 1% between 2012 and 2022 due to reduced investment and outdated technology.
12. Bangladesh
Manufacturing (Output) Rank: 11
Employment % by Industry Rank: 25
Weighted Average Rank: 11.3
Industrialization in Bangladesh is quite strong as 84% of export revenues now come from apparel alone. Moreover, the country’s GDP increased from $18 billion in 1980 to $460 billion in 2022, making it the 35th largest in the world.
11. Malaysia
Manufacturing (Output) Rank: 12
Employment % by Industry Rank: 9
Weighted Average Rank: 10.5
Malaysia has achieved a high level of industrialization, evolving from a resource-based economy into a diversified, competitive manufacturing hub, particularly in the electrical and electronics (E&E) sector. Despite challenges such as premature deindustrialization in the late 1990s and reliance on low-value manufacturing, Malaysia has maintained a major global presence, especially in semiconductors. The New Industrial Master Plan 2030 aims to further industrialize by shifting towards high-value manufacturing.
10. Saudi Arabia
Manufacturing (Output) Rank: 8
Employment % by Industry Rank: 33
Weighted Average Rank: 9.7
With 17% of its total workforce employed in the Industrial sector and a manufacturing output as high as $157,875 in 2023, Saudi Arabia is one of the top 10 most industrialized countries in Asia.
9. Thailand
Manufacturing (Output) Rank: 9
Employment % by Industry Rank: 23
Weighted Average Rank: 9.5
In 2021, exports comprised approximately 58% of Thailand’s GDP. As a newly industrialized country, Thailand had a GDP of 17.367 trillion baht (US$495 billion) in 2022, making it the 9th largest economy in Asia.
8. Vietnam
Manufacturing (Output) Rank: 10
Employment % by Industry Rank: 6
Weighted Average Rank: 8.6
Vietnam has become a key player in global supply chains, particularly in electronics, textiles, and footwear and hence, attracts major corporations like Samsung, Intel, and Nike. Strategic infrastructure improvements, such as port expansions and new highways, coupled with a young, dynamic workforce, are further speeding up this growth.
7. Turkey
Manufacturing (Output) Rank: 7
Employment % by Industry Rank: 10
Weighted Average Rank: 6.6
In 2023, the manufacturing output for Turkey stood at $215,037, making it one of the top 20 manufacturing countries in the world. Turkey ranks 7th in our list of the most industrialized countries in Asia with a weighted average score of 6.6.
6. Indonesia
Manufacturing (Output) Rank: 5
Employment % by Industry Rank: 26
Weighted Average Rank: 6.6
In 2023, the value-added manufacturing output for Indonesia was $255,961, making it one of the biggest manufacturing centers in Asia. According to the World Bank, the manufacturing sector’s average GDP growth rate from 2014 to 2022 in Indonesia was 3.44% per year and surpassed the global average of 2.35% and the OECD average of 2.08%. In 2021, the country’s Manufacturing Value Added (MVA) reached USD 228 billion, contributing 1.46% to the global total. The sector’s average contribution to Indonesia’s GDP over this period was 19.9%, compared to the world average of 16.26%.
5. Russia
Manufacturing (Output) Rank: 6
Employment % by Industry Rank: 12
Weighted Average Rank: 6
In 2022, Russia had 27% of its total workforce employed in the industrial sector. Moreover, in 2023, the value-added manufacturing output of Russia was $251,577, making it one of the most industrialized countries in the world.