The Landscape of Manufacturing: A Look Into the Past and the Future

According to a 2019 Georgetown University study of manufacturing in the U.S., manufacturing used to be the dominant force in the job market in 1940, with 23% of all American jobs provided by the industry. By 2016, that percentage had decreased dramatically to only 10%, and similar losses were seen in American agriculture, mining and other labor-intensive jobs during the same period.

There is no doubt that it must have been frustrating for the producers of horse drawn carriages in the early 20th century, who began to lose their monopoly on the transportation market as a result of the growing popularity of the automobile. The emerging market pushed aside a previously well-established industry, and with it, the workers in that industry. Fast forward to the present day, and it is evident that the next large industrial revolution is no longer on its way, it has already arrived. Immense strides in technologies related to big data, the internet of things, robotic-process automation, artificial intelligence, and additive manufacturing will all play a part in bringing about the new post-revolution standard.

For some industries, these new standards already constitute a reality that the average individual would consider the equivalent of a sci-fi novella. Inside an Amazon Fulfillment Services warehouse, hundreds of robots hum with activity as they roll around the warehouse floor, picking up shelves filled with products or delivering items to packing chutes, all in seamless synchrony. These robots and a complex virtual management system have allowed Amazon to achieve the quickest average delivery times of any business in history.

Meanwhile, back in the manufacturing sector, the industry is combining big data with AI to increase its operational efficiency, no longer focusing simply on past performance but instead using this data to perform in-depth predictive analysis. In the past, performing any sort of detailed or intricate tooling required the human hand, but now with the use of additive manufacturing and 3D printing greater precision can be achieved on the same tooling project in a fraction of the time. Even our advances within the past 20 years bear witness to the effectiveness of our technological efficiencies: Per the Georgetown University study, “In 2000, the 18 states where manufacturing was the largest employer produced $968 billion worth of output, or 46 percent of US manufacturing output. In 2016, these 18 states produced $925 billion, or 44 percent of US manufacturing output, even though manufacturing was no longer the largest employer in most of them. Combined, these 18 states employed 8.8 million manufacturing workers in 2000 and 6.3 million manufacturing workers in 2016.”

In the midst of all this change, the question on the forefront of everyone’s mind is: If our manufacturing jobs are given to the products of our technological advancements, what will WE do? The answer is as simple as it is complex. We will adapt in much the same way as the manufacturers of horse drawn carriages who adapted their skillsets and began producing vehicles instead. Technical knowledge of the manufacturing will most likely always be a prerequisite for workers in the manufacturing industry, but with the advent of significant time and cost reducing innovations, technologically savvy laborers will also be needed to overcome the inevitable obstacles associated with a 21st century manufacturing revolution. The specifics associated with modernizing the workforce can often take time and create temporary deficits in the number of skilled laborers necessary to move an industry forward. However, the underlying theme is clear: We will continue to innovate and refine our processes but there will likely always be a need for human intervention and oversight.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2019 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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The Landscape of Manufacturing: A Look Into the Past and the Future
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Skilled Labor Shortage in the Manufacturing Industry
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