By Amar Hanspal, CEO Bright Machines
The case has never been more vital for new policy that supports a robust manufacturing sector. Though offshore manufacturing, and the low prices that result from it, has been good for consumers, globalization has contributed to the decimation of jobs at home and become one of the biggest threats to our environment. And it’s only getting worse, as the U.S. has suffered a net loss of more than 91,000 manufacturing plants and nearly 5 million manufacturing jobs since 1997, and COVID-19 shutdowns have wiped out more than half of the jobs gained in the past decade. Meanwhile, 90% of global trade is seaborne, and this shipping activity emits 938 million tonnes of carbon dioxide annually. Today, there are considerable opportunities to compete globally while keeping manufacturing closer to consumers, as technology leads to shifting economics and greater production capacity, affecting our ability to innovate and create better products for consumers. To make the promises of manufacturing at-home a reality, to save both jobs and our environment, the industry needs long-term policy solutions that incentivize manufacturers and legislators to go beyond photo ops and commit to a more sustainable, and yes, less global, future for manufacturing.
To create conditions that enable manufacturers to compete and thrive in a global marketplace while optimizing for sustainability and job creation, here’s what should be top of mind in creating national-level policy:
The unpredictable conditions of 2020 have shown how vitally important it will be to embrace more localized production in manufacturing. Manufacturers who are inherently less dependent on globally distributed supply chains – who rely on a network of suppliers and production lines closer to where consumers ultimately buy products – were less subject to disruptions in their production and could carry on business as usual. It’s a study of how flexible, localized production can lead to increased resiliency.
Localized production is, in fact, an area where the U.S. used to excel, but the decades-long shift to globalization has led to less vertically-integrated manufacturers and more who rely on a complex network of specialized suppliers, who themselves rely on subcontractors for parts and assembly. We saw the flaw in the networked system’s design during the early days of the pandemic when consumers were unable to get even everyday basics, many of which are imported, as manufacturers struggled to respond to increased demand or had to pause their production lines entirely.
Localized production lends a competitive advantage to manufacturers who strategically employ it, especially in times of disruption. As our economy is increasingly vulnerable to disruption – from natural disasters, trade wars, or pandemics – policy should encourage a local, distributed approach that solves issues like these.
Globalization has been so prevalent over the last several decades in large part because the economics were advantageous for both manufacturers and consumers – but that technology is poised to flip the script on that economic advantage. Advanced technology applied to manufacturing – tech like adaptive robotics, computer vision, and machine learning – makes it possible to innovate, produce and assemble products faster, at a higher quality, and at a lower cost than traditional manufacturing allows. Investing in technology must be seen as an intrinsic investment in encouraging localized production.
Still, adopting these new technologies is often slow to start, despite the massive return on investment, presenting a significant barrier for manufacturers to overcome. This is why policy that incentivizes the adoption of the latest, most sustainable technology will help the industry at-large make this critical shift.
Any conversation about technology in manufacturing would be incomplete without considering as well how it impacts factory jobs. The dire truth is that manufacturing jobs have been on a steady decline for decades thanks to globalization (and despite policy attempting to grow the sector). This decline was only made worse during the pandemic as manufacturers grapple with distancing guidelines and changing consumer demand. Indeed, fears that technology to automate manufacturing processes would only exacerbate these conditions are not unfounded.
And yet, there are opportunities too. If public and private sectors work together, it’s possible to create and sustain manufacturing careers through reskilling efforts. These efforts would smartly focus on training people to work with the high tech solutions that factory floors of the future would employ (and these jobs would benefit from being less prone to the high turnover rates of the often tedious, monotonous jobs available on production lines today).
Beyond reskilling, policies that help manufacturers embrace remote work should be on the table. Again, technology is the enabler here, as more monitoring and programming can be done via software instead of onsite, which allows manufacturers to prioritize safe working conditions for essential employees. Policies that consider how the workforce can grow and level-up through technology will help ensure that the sector prioritizes their bottom line and their employee base’s well-being.
For A More Sustainable Sector
Together, reshoring, reskilling, and reimaging manufacturing through advanced technologies have tremendous potential to create a more resilient industry and a more sustainable one. Reducing worldwide shipping while creating skilled jobs is a win-win. A focused, national policy that helps inspire manufacturers to make these inevitable changes in the near term will help ensure America is an environmental sustainability leader.
Originally posted to Forbes on Nov. 2, 2020.