Globalization is reflected in a proliferation of free trade agreements, double tax agreements, investment guarantee agreements, mutual recognition, and special economic zones. More economies are pushing to raise their competitiveness quotient, in which the technology index represents a significant component. The market gurus have highlighted innovations in technologies and systems which have allowed miniaturization, greater precision, new functionalities, new materials, shorter life cycles, and higher productivity.

There is a progressive trend for product manufacturers to outsource more of their operations so that they can concentrate on their core strengths of design and development. This provides excellent opportunities for the more enterprising precision engineering companies to move up the value chain. A business model that is becoming increasingly common is one in which the product manufacturer nurtures of pool of supporting companies to form a manufacturing ecosystem. There are a number of important considerations for precision engineering companies to adapt to such a symbiotic relationship.

The strategic importance of Small and Medium Enterprises in general and in the precision engineering industry in particular is widely recognized, as they make a significant contribution to the economy and to employment. Often hindered by limited resources, precision engineering companies require assistance in the five Cs: competencies (know-how and intellectual properties); capital (for investments and expansion); connections (to markets and alliances); conditions (government policies and macroeconomic environment); and culture (attitudes and mindset of the workforce). The measurement of very small parts (with structures smaller than 0,1 mm) has become another focal point of work. After a probing system specially tailored to microstructures was developed by the Coordinate Measuring Machines Section in recent years and successfully transferred to industry, this system is now increasingly used for the calibration of small parts.

To meet the current challenges, experts in the industry have suggested strong leadership in decision making, giving priority to process innovation, and digitizing competitive knowledge. The emerging technologies that will be significant are life sciences, information and communications technologies, environmental technology, and nanotechnology. Manufacturing technology, infrastructural technology, and energy are important enablers.

Countries such as Singapore, the Republic of China, and Malaysia see technology as an important vehicle in their transformations into high-tech, knowledge-based economies, as low value-added manufacturing operations continue to move to lower-cost countries. With the tendency of the original equipment manufacturers to outsource more of their operations, the enterprising precision engineering companies are raising their competencies to position themselves better for such opportunities. Another development that has significantly influenced the modus operandi of precision engineering companies is the need to follow the multinationals to new countries and markets. With production facilities spread across different countries, precision engineers must equip themselves with the necessary IT and supply chain management facilities to coordinate their operations.

The precision engineering industry is playing a strategic and important role in the manufacturing industry. They are thriving to meet the requirements of all the sectors of the manufacturing industry starting from large, heavy industries to SME's.The use of precision machining has brought a radical change in the accuracy of manufacturing procedure in the industry. Precision engineering has become an integral part of mechanical and manufacturing industries.