How Technology is Changing American Manufacturing
How Technology is Changing American Manufacturing
There’s no question that today, American business owners and employees are facing uncertainty in the world of work. Entire industries are experiencing changes that are rapidly redefining how they approach work.
That’s especially true in the space we at Ampogee call home: operations and manufacturing. One of the first questions that come to mind for both employees are business owners: How will emerging technologies impact our work?
Amidst the ongoing political discourse, there’s growing concern over the role of work in an ever-changing manufacturing climate. The way we do business and the way we make things is changing every day. And, it’s not just the way we handle the day-to-day tasks that are changing. There’s a fundamental sea change in the way businesses are thinking about their work.
Here’s what we mean:
- FarmLogs, a startup in Michigan is helping farmers better predict, monitor, measure crops while mitigating loss from weather and pests.
- Plethora, a San Francisco startup is courting young software developers to develop production prototyping and helping small businesses and factories move quickly. Their fully-integrated factory in California incorporates advanced robotics, 3D printers, and traditional CNC milling machines.
- Before they were purchased by Uber, Otto was developing technology that would allow trucks to be operated without a driver.
These changes are precipitated by rapid advances in mobile technology and emerging platforms that are revolutionizing not only the speed but the caliber and type of work that is being done. This has a broad impact on the people that are hired by businesses in many industries.
The American manufacturing workforce is seeing two competing trends happening on parallel tracks at the same time.
- Companies are in a race to identify advanced technologies — think applications, automated intelligence, robotics — and the employees who are equipped to work with them.
- As the traditional workforce meets millennials (and the emerging ‘Generation ‘Z’), companies are increasingly looking to upskill their workforce and embracing automation of menial, repetitive, and dangerous tasks.
Despite all this, manufacturing in the United States continues on an upward trajectory. According to Bloomberg, this past March, healthy consumer spending and recovery in the oil sector has led to the highest gains in manufacturing output since November 2014. At the same time, there are 324,000 open factory positions — triple the amount during the recession. This is occurring at the same time as growing concerns over the uncertainty automation brings to the workplace and President Trump’s fight to restore and return American manufacturing jobs.
The New Face of American Manufacturing
In this regard, the conversation needs to shift from output to human resources. Manufacturers that are serious about attracting and retaining new talent, out of necessity, need to start thinking differently about the way they approach attracting new talent. According to a report by the Manufacturing Institute, there are a few hurdles employers need to overcome to acquire talent in the face of a burgeoning skills shortage:
- Forty-four percent of employers say they have moderate difficulty acquiring talent that can exploit advanced technologies — 3D printing, robotics, Internet of Things, and application development.
- Many employers are not threatened that “robots will steal jobs.” In fact, 37% believe that the adoption of advanced manufacturing technologies will result in their hiring additional employees.
- Business owners are aware of a skills shortage and 29% said it exists and will only worsen in the next three years.
- There’s a premium on degrees — nearly three-quarters of non-factory floor jobs are placed with candidates who have a four-year or an advanced degree.
The New American Factory Worker
So, what does the factory worker look like today, and what will they look like in the future?
In 2015 a unique event occurred. Businesses saw a large shift in the demographic of the American workforce. On one side, Millennials (those who were born between 1981 and 1997) became the largest part of the labor force, representing nearly 54 million workers. For the first time ever, this group surpassed that of the “GenXers” (people born between 1965 and 1980). Yet, at the same time, the American workforce is aging.
Enter “Generation Z.”
This group (those born between 1994 and 2004) is incredibly unique. They are a vibrant, idealistic, young, and truly mobile generation of workers who last year started matriculating into the American workplace. They are the first people who have truly never lived in a world without mobile apps and connectivity. Unlike the GenXers, they don’t imagine a career rooted in one place for multiple decades. But, much like the Millennials, they are idealistic, seek to make change, and strive for career advancement.
“The younger job seekers are different in that they are very idealistic and at the same time expect bigger and more frequent job changes throughout their careers, but they’re also looking, as generations before them, for long-term advancement,” said Tara Sinclair, an associate professor of economics at George Washington University.
Upskill the Factory = Upskill the Workforce
We’re in the midst of a rapidly evolving ‘fourth industrial revolution’ and just as the way we do business changes, so must our mindset for our employees.
For the most part, since the dawn of the second industrial revolution, the characteristics of manufacturing centered around build, repeat; build, repeat. Employers who relied on continuous output leveraged motivational tactics that relied on employees to partake in highly-repeatable, menial tasks. Regulations were few and tasks were not yet complicated by rapidly advancing changes in technology.
This ‘performance-based’ mindset has infiltrated well beyond manufacturing into corporate America in the form of “the more/harder you work, the more you’ll make.” Many manufacturers still utilize this theory of motivation as the basis for their compensation review processes or promotion practices. Just as manufacturing is now evolving, the management practices for motivating people need to evolve as well. Many employers are starting to see that upskilling is the way to embrace the changing dynamics of a workforce impacted by technology. According to the Manufacturing Institute, the most common strategy to upskill employees in advanced manufacturing is to train in-house, followed by recruiting local STEM students and offering vocational training.
In a recent survey of manufacturing employers based in Michigan, one of the most important factors for this emerging cohort of American workers is a presence of opportunities — things like opportunities to learn, availability of apprenticeships, and consistent access to computer technology and course work.
Jobs are not as repeatable as they were in the past. Today, the manufacturing world is threatened by a widening skills gap, increased automation, and ever-changing technology that impacts the way we get things done.
This is a theme we will be covering over and over on the Ampogee Blog. So, be sure to stay tuned.