March 12, 2017
Column | big picture

The return of manufacturing

Many anticipate factories returning to America. They will return, but they will look very different from those of the past.

By David Maloney

I live in Pittsburgh, a city that was once the poster child for industrial America. It is not called the "Steel City" for nothing. For much of the last century, the region was an industrial powerhouse, churning out the steel that built the nation. Then came the 1980s, and the Steel City became a Rust City.

Plants neglected for decades became too expensive to upgrade. Manufacturers claimed that labor costs were too high to compete and began sending jobs to nonunion facilities in other states or overseas. Their counterparts throughout the country quickly followed suit, abandoning our shores for cheaper labor elsewhere.

With the advent of the new administration in Washington, we hear great hope that the kind of manufacturing jobs we lost in the last few decades will come back.

They won't. At least not like they once were.

Yes, manufacturing will begin to return, but it will not be due to the threat of tariffs and political bullying. It will be because manufacturing in America makes sense again. The difference now is that automation can make manufacturing at home competitive once more.

Several factors provide the perfect atmosphere for automation's growth. First, the rise of a middle class in China and elsewhere means that overseas labor is no longer the bargain it once was. Second, there have been huge advances in computing power, with costs that continue to drop. Likewise, developments in areas like onboard intelligence, vision systems, 3-D printing, and the Internet of Things all promote the growth of automation.

Developments in the robotics industry are providing new tools for modern automation. The International Federation of Robotics expects that 1.4 million new industrial robots will be put to work in factories worldwide within the next two years. That's a huge increase, considering there are just 2.6 million in use today. To underscore this trend, IDC Research predicts that by 2020, some 30 percent of tech companies will have a person identified as "Chief Robotics Officer."

As for Pittsburgh, it's a Rust Belt city that had to learn to reinvent itself. Today, it is a leader in developing robotics, thanks in large part to research at Carnegie Mellon University and the many robotics companies it has spawned.

While old-style manufacturing jobs will not return, there is great potential for job growth in modern factories where people and automated equipment work together (you can read about one such factory here). However, these will require employees with different skill sets from those needed in the past.

As a nation, we need to concentrate our educational efforts on the technical jobs needed for the future because competition will be fierce. Remember those 1.4 million new robots expected within the next two years? An estimated 40 percent of them will be headed to factories in China.

About the Author

David Maloney
Chief Editor
David Maloney has been a journalist for more than 30 years and has been with DC VELOCITY since April of 2004. Prior to joining DCV, David was senior editor for Modern Materials Handling, where he reported extensively on distribution and supply chain operations. David also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. David combines a background of reporting on logistics with his video production experience to bring new opportunities to DC VELOCITY readers, including Web-based videos highlighting top distribution and logistics facilities, Webcasts and other cross-media projects. He also is the host and producer/director of Move It!, DC VELOCITY's online program that explains "how the stuff we use everyday gets to us." David continues to live and work in the Pittsburgh area.

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