Advanced Manufacturing

Chapter Overview

1. Executive Summary

Iraq does not start from an absence of industry. Statistics Authority data for 2024 recorded 916 large industrial establishments, 129,177 workers, production worth 17.232 trillion dinars and value added of 8.428 trillion dinars. But the industrial base is weighted towards food, construction materials, beverages and products linked to domestic demand, while machinery, equipment, components, electronics and advanced engineering remain weaker. The question for Part Six is therefore not “How do we produce more?”, but “How do we increase complexity, value and learning within what we produce?”.¹

The business environment reveals an innovation gap. In the World Bank Enterprise Survey for Iraq 2022, 12.5% of the formal firms covered spent on research and development, 18.5% introduced a new product or service, and 10.3% recorded process innovation. These are not measures of advanced manufacturing alone, but they indicate that technology diffusion within firms is not yet the general rule, and that any robotics or digitisation policy must build organisational and engineering innovation capability alongside it.²

There are, however, practical foundations to build on. The State Company for Electronic Systems reports expertise in DCS, PLC, communications, power, software and circuit-board design and manufacturing, and presents laboratories associated with Siemens, ABB, Honeywell and Allen-Bradley. The State Company for Telecommunications and Power Equipment produces smart meters, transformers, communications and power equipment, and is pursuing opportunities in solar power systems. The Industrial Research and Development Commission also has research centres and plans, an incubator and training programmes. These capabilities do not amount to a complete “advanced manufacturing” sector, but they prevent the mistake of starting from zero.³

Globally, automation is accelerating. The latest International Federation of Robotics data showed that factories installed approximately 603 thousand industrial robots in 2025, while the global operational stock rose to approximately 5.079 million robots. But the lesson is not a purchasing race: a robot delivers productivity only when there is a stable product, a designed work cell, safety, maintenance, programmers, quality, data and demand that justifies the investment.⁴

Iraq Vision 2045 therefore adopts a capability ladder: informed importing and use; local integration through engineers and System Integrators; manufacturing equipment, components, tooling, boards and control systems; designing products, systems and intellectual property; then specialisation and exports. The state does not move to a higher rung by administrative decision, but when the previous rung demonstrates quality, repeatability, a market and skills.

Discipline matters even more in semiconductors. The global chip market exceeded 630 billion dollars in 2024 according to the final WSTS update reported by SIA, and the value chain is highly specialised across design, equipment, materials, fabrication, testing and packaging. Iraq should not set an “advanced chip factory” as an early political objective. A realistic path begins with circuit design, embedded systems, PCB and testing, then fabless design, packaging/test and partnerships in power electronics and sensors, leaving any fab decision to a later assessment point when electricity, water, skills, markets, a partner and economics are all in place.⁵

2. The Central Question and the Chapter’s Scope

The central question is: how can Iraq build an advanced industrial base between 2027 and 2045 that adopts automation, robotics and industrial computing, gradually moves into engineering, design, components and high technology, and enters future value chains, without turning policy into expensive equipment procurement, permanent protection or an unsustainable chip project?

2.1 What the Chapter Resolves

• The capability ladder from adoption to integration, design and exports.
• A mechanism for selecting technologies and future chains according to markets, learning and resilience, rather than the appeal of a name.
• A pathway for factory automation, robotics and smart factory laboratories.
• Developing industrial electronics, embedded systems and precision production tools as an enabling layer.
• A long-term semiconductor pathway based on Design / Packaging / Power Electronics before any Fab decision.
• Skills, finance, procurement, quality and supplier programmes that spread technology within firms.

2.2 What Is Left to Other Parts

• Electricity, gas, renewable energy, water, roads, ports and internet are addressed in detail in Part Seven.
• General industrial policy, protection, trade and macro-finance were established in Part Four; here they are used only to support advanced manufacturing.
• Research and development, innovation, artificial intelligence and data sovereignty were established in earlier chapters of Part Six and enter here as inputs.
• The chapter does not select a robot brand, supplier, company or specific factory location.

3. Definitions and Measurement Rules

4. Iraq’s Industrial and Technological Baseline

The large industrial base expanded numerically from 682 establishments in 2020 to 916 in 2024, and nominal production value rose from approximately 6.294 to 17.232 trillion dinars. But nominal growth does not measure productivity or technological complexity, and the report covers large establishments and excludes the Kurdistan Region in the series used. The advanced manufacturing baseline therefore requires an independent survey of machinery, processes, skills and data, rather than production value alone.⁶

Chapter Three of Part Four established that the large private sector in 2024 was heavily concentrated in food, non-metallic mineral products and beverages, and that the medium-sized establishment tier was relatively small. This makes a leap “from a traditional factory to a chip factory” illogical. The path starts with sectors that have factories and real demand, then improves processes, engineering and suppliers within them before moving to more complex products.⁷

The World Bank survey provides another signal: formal Iraqi firms still operate in an environment of relatively low innovation; only 12.5% of firms covered spent on R&D, and 10.3% introduced process innovation. The survey also recorded 12.3 electricity outages in a typical month among the firms covered. This figure is from 2022, not a national electricity baseline for 2026, but it explains why industrial automation cannot be separated from the energy reliability addressed in the next part.⁸

The largest data gap in this chapter is the absence of an open national figure for the number or density of industrial robots, and the absence of a recent unified survey of CNC, MES/SCADA, industrial ERP, machine vision, digital twin and additive manufacturing use. The Vision does not fill this gap with market estimates. The first programme in 2027 is the “Digital Industrial Readiness Survey”, so that the denominator becomes known.

5. From Manufacturing to Advanced Manufacturing

Part Four established that industrial policy should not select factories merely because they are local; it must select chains with demand, inputs, learning capability and market links. Advanced manufacturing adds a new criterion: how much knowledge and engineering accumulates as the chain expands? A food factory can be advanced if it uses precision control, traceability, machine vision, high-speed packaging and continuous testing. An electronics factory can have low capability if it merely assembles imported components manually, without design or testing.

The Vision therefore adopts “upgrading within the chain” before jumping into new chains. Iraq starts with cement, fertilisers, food, pharmaceuticals, energy, water, electrical equipment and construction; it digitises quality, maintenance and control, creates suppliers and laboratories, then converts what it has learned into control products, sensors, equipment and engineering services saleable to other sectors.

6. The Industrial Capability Ladder: Adoption, Then Integration, Then Design

The first stage, “adoption”, does not mean dependency; every industrial country has purchased technology from abroad. The problem is remaining an importer of the same knowledge for twenty years. Every major technology contract therefore requires practical training, documentation, diagnostic tools, critical spare parts, performance data and training for a local integrator.

At the “integration” stage, Iraqi value lies in connecting global components into a system that works in an Iraqi environment: a control panel, PLC, industrial networks, safety, vision, SCADA, databases, mechanics, fixtures and commissioning. This stage is realistic because the State Company for Electronic Systems already reports expertise in control systems and industrial laboratories. The requirement is to open the market to a competitive ecosystem of private and public integrators, rather than confine the function to a single entity.⁹

Manufacturing of parts, tooling, panels, certain sensors, software and interfaces follows, then the design of complete products. The criterion for moving forward is a local supplier that repeatedly meets specification, price and deadline, rather than a localisation percentage on paper.

7. Smart Manufacturing: Digitising the Process, Not the Disorder

UNIDO’s approach to smart manufacturing links digital readiness to processes, skills and innovation, and proposes Smart Factory Labs for testing technologies and training before scaling up. The lesson for Iraq is that a factory without preventive maintenance, standard work and defect measurement will not become smart merely by adding more sensors. First stabilise the process, then measure it, connect it, automate it and use artificial intelligence where it produces better decisions.¹⁰

The chapter proposes a maturity model with five levels: 0, manual and unmeasured; 1, documented processes and basic data; 2, connected equipment and digital monitoring; 3, integrated MES/Quality/Traceability; 4, predictive improvement and flexible automation; 5, limited autonomy and human oversight. Not every factory is expected to reach level 5; the optimal level depends on economics and sector.

The priority for 2027–2030 is medium-sized and large factories with stable demand, because automation requires enough scale to justify investment. Small enterprises benefit instead from shared services: CAD/CAM, three-dimensional printing, measurement, maintenance, robotics as a service and experimental cells.

8. Robotics: Adopt Use Before Manufacturing the Robot

Global installations reached approximately 603 thousand industrial robots in 2025, and the operational stock exceeded five million. Growth is driven by expanding applications, falling integration costs and improvements in machine vision and artificial intelligence, rather than “replacing people” alone. A robot is appropriate when a task is repetitive, dangerous, requires precision and consistency, or takes place in an environment unsuitable for humans.¹¹

Iraq does not need a promotional target such as “manufacturing a national robot” at the first stage. It needs an integrator market that selects the appropriate robot, designs the end effector, fixture and safety cell, programs it, integrates vision and maintains the system. When these capabilities recur across hundreds of cells, manufacturing components, motion modules, control cabinets or mobile robot platforms becomes defensible.

Applications begin with welding, painting, handling, packaging, inspection, palletising, warehousing and hazardous processes, prioritising existing Iraqi sectors. Low-cost labour is not automated for automation’s sake; lifecycle costs, failures, energy consumption, safety, demand changes and the ability to redeploy workers to higher-skilled jobs are assessed.

9. Precision Production Tools and Supporting Engineering

There is no advanced robotics, electronics or medical-device industry without a less celebrated layer: CNC, moulds and dies, cutting tools, precision welding, heat treatment, CMM measurement, calibration, surface finish, CAD/CAM, lawful reverse engineering and material reliability. This is an “enabling industry” serving dozens of chains.

The Vision therefore proposes a network of shared precision manufacturing centres near industrial clusters and universities, instead of each company buying expensive machinery with low utilisation. A centre sells operating hours, measurement, testing and training, and publishes utilisation, lead time and first-pass yield as performance measures.

10. Industrial Electronics, Control and Power

This is the most realistic entry point into technological complexity. The State Company for Electronic Systems works in DCS, PLC, communications, software and circuit boards, while the State Company for Telecommunications and Power Equipment produces smart meters, transformers and power equipment. Instead of creating new entities, the Vision uses existing capabilities as a testing and partnership base, opening integration and component contracts to the private sector, universities and start-ups.¹²

The priority portfolio includes MCC/control panels; meters and monitoring; data acquisition; embedded controllers; industrial gateways; power electronics for motors, solar power and storage; environmental and water sensors; detection and tracking systems; and test equipment. The objective is not “Made in Iraq” on the box, but designing the BOM, firmware, PCB, test fixture, certification and after-sales service.

11. High Technology: How Do We Choose Without Chasing Slogans?

High technology is not a single sector and can consume the budget if chosen politically. Iraq therefore uses a selection matrix of seven questions: is there clear domestic or regional demand? Is there a nearby skills, materials or infrastructure base? Does the sector transfer knowledge to other sectors? Can it export? Is electricity and water consumption acceptable? Can the technology be accessed legally and commercially? Is there a partner with a real incentive to build local capability?

The weights are proposals, not law. What matters is preventing a project from bypassing the investment gate because it is “advanced” in name. A supported sector must demonstrate learning milestones and exports or measurable, economically justified import substitution.

12. A Portfolio of Future Value Chains

13. Anchor Demand and Smart Government Procurement

The state is the largest buyer in electricity, water, health, communications and infrastructure. This demand can create a learning market, or destroy competition if it becomes contracts reserved for a local company without standards. The answer is challenge-based procurement: the entity announces the problem and required performance, permits local and international consortia, and awards pilot contracts to those demonstrating results.

For emerging products, the state can act as a first buyer without guaranteeing profit: purchase a test batch, apply acceptance criteria, then open competition. Procurement thus becomes a tool for acquiring engineering, quality and reliability, rather than a formalistic “local content percentage”.

14. Quality Infrastructure: Laboratories, Standards and Metrology

Every technological advance reaches a bottleneck at testing. A smart meter, medical device, power board or electronic component cannot be exported unless measurement, calibration and accreditation are accepted. Laboratories and metrology are therefore treated as shared industrial infrastructure, rather than administrative buildings.

The programme connects the Central Organization for Standardization and Quality Control, universities, company laboratories and ministry centres in a network of specialisations with a clear accreditation scope: electricity and power, EMC, safety, environment, dimensions, materials, reliability and software/firmware validation where needed. Laboratories are assessed by testing time, the number of accredited standards and acceptance of results outside Iraq.

15. Smart Factory Laboratories and Testing Centres

UNIDO recommends Smart Factory Labs as training and experimentation environments for testing Industry 4.0 technologies before deployment. Iraq needs 2–3 regional laboratories in the first stage, with locations selected competitively according to industrial concentration, universities, energy and connectivity, rather than geographic quota allocation.¹³

A model laboratory contains a robot/cobot cell, a compact CNC machine, a smart conveyor, PLC/SCADA, vision, a digital twin, an industrial network, an industrial cyber range, a quality station and OEE data. Companies pay for experiments and training, universities use it for graduation projects, and suppliers demonstrate solutions on open terms.

16. Technology Transfer, Partnerships and Investment

Technology transfer does not occur merely because a contract includes the words “transfer of expertise”. This must become deliverables: engineers reaching certified integrator level; processes handed over with complete documentation; the proportion of maintenance performed locally; a subsystem design owned by the Iraqi partner; qualified suppliers; and a patent or shared IP where genuine research exists.

The state favours partnership when it shortens learning time or opens a market, rather than because the partner is foreign or large. Contracts involving sensitive technology are examined for competition, security and supply-chain implications, but “sovereignty” is not used as a pretext to close access to the best technologies.

The Industrial Cities Authority provides a spatial asset that can be developed into smart clusters, but a city’s success is not measured by allocated land. It is measured by the electricity, communications, laboratories, clearance, maintenance, suppliers, skills institutes and shared services within it.¹⁴

17. New Industrial Skills

Demand for skills changes before job titles do. Advanced manufacturing needs PLC technicians, robot technicians, CNC programmers, metrology technicians, industrial network engineers, embedded developers, power electronics engineers, quality engineers, reliability engineers and data/MES specialists. Theoretical education alone does not produce these capabilities.

The Vision uses a 30/70 model in applied programmes: theoretical foundations and laboratories, followed by actual industrial training and certification tasks. Short stackable certificates are developed that technicians can accumulate instead of waiting for a new university programme. Companies receiving modernisation support commit to training places and skills-transfer targets.

The Industrial Research and Development Commission already has annual training and research plans and an incubator, and calls for research with industrial and economic returns. These activities are linked to an industrial demand platform: a factory publishes a problem, a university or centre offers a solution, and support is paid when a KPI is met, not when a report is delivered.¹⁵

18. Finance and Conditional Incentives

The greatest financial mistake is subsidising a machine purchase and then leaving it underused. The modernisation instrument therefore has four windows: a readiness-audit voucher; equipment financing/leasing; a matching grant for integration, software and training; and an outcome reward after demonstrated improvements in OEE, quality, energy or exports.

A blanket tax exemption is weaker than accelerated capital depreciation, conditional interest support or a partial guarantee for an equipment loan backed by a utilisation study. Every form of support includes a clawback if the capacity is not operated or the agreed training or knowledge transfer is not carried out.

19. Semiconductors: Where Should Iraq Enter?

Semiconductors are a critical input for electronics, energy, communications, vehicles and devices, with their chain distributed globally across design, EDA, materials, equipment, wafer fabrication, packaging and testing. An OECD study confirms that dependencies are interwoven and that risk reduction means understanding concentrations and building resilience and alternatives, rather than closing trade.¹⁶

Iraq’s decision is to enter through less costly learning stages closer to existing capabilities: electronics engineering and embedded systems, PCB, test engineering, IC design education, EDA access and analogue/power design, followed by small fabless companies linked to Iraqi and regional applications. Packaging/test or power modules can then be piloted in partnership if sufficient demand and exports emerge.

India’s experience is useful because its strategy was not reduced to a fab: the India Semiconductor Mission supports design, OSAT/ATMP and compound semiconductors alongside chip plants, with substantial financial support. Malaysia built its 2024 strategy on an existing E&E and OSAT base, then targeted upgrading into design and advanced packaging and training 60 thousand engineers. The lesson for Iraq is “start from your position on the ladder”, rather than copying the subsidy scale or final stage of a country decades ahead.¹⁷

20. The Fab Gate Decision

The Vision does not make building a wafer fab a binding target for 2045. It sets a “decision gate” between 2040 and 2045. If the conditions are not met, deciding not to build is a success in discipline, not a failure of ambition.

Even when the gate is passed, it is often better to begin with a mature node or power/analogue/compound semiconductors linked to industrial demand, rather than chase the leading edge, which requires a permanent capital and technological race.

21. Supply Chains and Industrial Resilience

Advanced manufacturing depends more heavily on international components, equipment and software, making BOM and supplier-chain transparency part of economic security. Every company in a priority chain needs a map of single-source components, lead times, approved alternatives and critical spare parts.

This does not mean stockpiling everything. Strategic stocks are built where disruption probability and impact are high and replacement time is long. Other risks are addressed through multiple contracts, specifications allowing alternatives and product architecture that avoids unnecessary lock-in to a single component.

22. Energy, Water and Sustainability

A smart factory is not advanced if it wastes more energy and water. Metering, energy per unit of output, specific water consumption, emissions and losses are integrated into MES/EMS from the outset. This is particularly important in cement, chemicals, food and electronics.

The design of major industrial electricity and water infrastructure is left to Part Seven. This chapter defines only the requirements: voltage quality, few interruptions, carefully assessed backup capacity, water meeting specifications, treatment and the ability to measure each line’s true cost.

23. International Comparisons: Mechanisms, Not Copying

24. Iraqi Industry in 2045

In Iraq in 2045, not every factory becomes “smart” at the same level. But major factories and priority chains operate with common data, predictive maintenance where worthwhile, traceable quality, flexible automation cells and OT/IT industrial security. Around them work integrators, tooling factories, laboratories and suppliers of electronics, power and software.

Iraqi companies can build a control panel, test station, vision system, traceability system, fixture or embedded controller, then integrate it into larger lines. A limited number of deep-tech companies emerge with IP and exportable products. In semiconductors, Iraq has a community for design, testing and packaging/power electronics, with the fab decision left to the economic gate rather than the slogan.

25. Stages of Transformation, 2027–2045

26. Indicator and Target Dashboard

The targets below are policy commitments, not forecasts. Where no unified Iraqi baseline exists, measurement begins in 2027 and relative targets are used rather than inventing a baseline figure.

Future WBES figures must not be compared automatically if the sample or definition changes. It is preferable to establish an Iraqi “Industry and Technology Survey” every two years, jointly involving the Statistics Authority, Ministry of Industry and universities, with published metadata so that progress can be verified.

27. The Implementation Programme Package

Programme 1 — Digital Industrial Readiness Survey

Inventory CNC/PLC/SCADA/MES/robots/quality/data/OT cybersecurity, skills and suppliers, with a maturity indicator for each participating establishment.

Programme 2 — Smart Factory Laboratories

2–3 shared applied laboratories for training, experimentation and testing, operating as a service to firms rather than an exhibition centre.

Programme 3 — Modernisation and Automation Vouchers

An audit voucher followed by a matching grant or leasing for projects demonstrating ROI, productivity, quality and energy performance.

Programme 4 — Iraqi Integrator Network

Certify companies and engineers in PLC/robotics/vision/MES/OT security and connect them to factories needing modernisation.

Programme 5 — Precision Manufacturing and Tooling

Shared CNC/metrology/tooling centres and a supplier programme for moulds, fixtures and critical spare parts.

Programme 6 — Industrial and Power Electronics

Embedded systems/PCB/control panels/smart meters/drives/inverters/sensors, with testing and certification.

Programme 7 — Challenge-Based Technology Procurement

Problems in electricity, water, health and industry become challenges, with pilot contracts followed by scale-up.

Programme 8 — Advanced Industrial Skills Academy

Micro-credentials, laboratories and factory training in mechatronics, robotics, CNC, quality, embedded systems and power electronics.

Programme 9 — Industrial Research Translation Fund

Finance Prototype → Pilot → Certification → First Customer, stopping funding if a stage gate is not passed.

Programme 10 — Future Value Chains

Select 3–4 chains every three years using the demand, learning, export and infrastructure matrix.

Programme 11 — Phased Semiconductor Programme

EDA/IC design/PCB/test → Fabless → Packaging/Power devices → Fab Gate; international partnerships and training.

Programme 12 — Industrial Supplier Resilience

BOM risk mapping, alternatives, a stock policy for critical items, supplier development and traceability.

28. Implementation, Cost and Financing Matrix

The chapter does not set an aggregate figure for financing “advanced manufacturing” before the survey. Support must go to a defined project and outcome indicator, not a broad heading. Heavy investments—especially in semiconductors—undergo an independent, transparent feasibility study at each stage.

29. Risks and Safeguards

30. Conclusion to Part Six and the Bridge to Infrastructure and Energy

Part Six has completed a single chain: technology is part of sovereignty; research and development turn knowledge into solutions; innovation turns a solution into a company and market; artificial intelligence and computing multiply capability; public digital infrastructure makes it available; data sovereignty governs and protects it; and advanced manufacturing converts it into products, tools and value chains. If these links remain separate, Iraq becomes a good user of others’ technologies. If they connect, it begins to develop technological capability of its own.

Advanced manufacturing immediately reveals the next constraint: every robot, server, CNC machine, laboratory and measurement tool needs stable electricity, water meeting specifications, transport, a port, rail and roads, reliable internet, an industrial city and daily services. The book therefore moves to Part Seven, “Infrastructure, Energy and Services”. The question is no longer what do we know and design, but what physical infrastructure allows that knowledge to operate every day at a competitive cost?