IT companies spend Rs five-six lakh per employee, who in turn generate business of Rs 50-60 lakh, and so the manufacturing sector should follow suit by investing in employees, Vikram S Kirloskar, vice-chairman, Toyota Kirloskar Motor, said.

He was speaking at a conference on 'Lean Manufacturing - Roadmap for SMEs to Achieve Global Manufacturing Excellence', organised here by CII, and Young Indians - Coimbatore Chapter.

The biggest challenge for the manufacturing sector was selection of the right kind of employees, Kirloskar said, adding that entrepreneurs should indulge in physical audit of both company and staff regularly to ensure success.

Jayakumar Ramdass, CII chairman, Coimbatore zone, said India had changed much faster than expected, improved its global competitiveness and was 11 ranks above China, its immediate competitor.

However, with increasing fuel and metal prices resulting in higher costs, the Indian industry's cost competitiveness had been challenged in the past two years with East Europe making inroads into exports, he said.

Another challenge had been lopsided IT growth, which had raised employee expectations and cost of living, Jayakumar said.