Along with other items in our ongoing series on the drivers of the future of manufacturing, The World Economic Forum stated there will be an increased demand for cross-domain skills covering technology, robotics, usage of new equipment and computer sciences. Companies lacking in these skills will soon be at a competitive disadvantage in the manufacturing future.
Manufacturing Jobs vs. Production
Since 1979, America has lost more than 7 million factory jobs, however, production has more than doubled, making the United States the second largest manufacturer in the world behind China. One reason for this decrease in jobs is industries that rely heavily on labor, like textiles, that have lost jobs to foreign countries with workers who accept lower wages. However, the automation taking place in these types of factories has made a bigger impact on the loss of factory jobs than offshoring.
The Effect of New Technology on Jobs
Ball State University’s Center for Business and Economic Research found that trade was the reason for nearly 13 percent of the loss of factory jobs. The other 88 percent of job loss was attributed to robots and other technologies that decrease the need for human labor. Since 1997, the US has lost 42% of jobs in metal fabrication, but production itself has increased 38%. This means manufacturers are doing more with less human labor.
Boston Consulting says robots will shrink labor costs up to 22 percent in the US, all while the costs of owning and operating equipment is dropping. In 2005, a spot welder could cost an average of $182,000, whereas in 2014 that number decreased to $133,000. This number is predicted to drop yet again to $103,000 by 2025.
Reshoring as the Key To Manufacturing Jobs
One benefit of the automation of human labor in factories is there is less of an incentive to ship work overseas to lower-wage countries. Companies and factories will remain in the US, as well as return production from those countries back to the US. Deloitte predicts that with the return of production US soil, the United States will overtake China as the most competitive country in manufacturing by 2020.
The Need for Cross-Domain Skills
While manufacturing will continue to grow and create jobs, it won’t be the traditional jobs in production. There are workers these days who can run old-fashioned presses and lathes, but are unqualified to run the new and updated versions of the same machines. The president of Trans-Matic, a metal parts manufacturer, said:
“It used to be that a factory owner would say, ‘I need 20 guys’ and pull them right off the street. Now it’s: I need 20 guys with very specialized technical skills.’ There’s a mismatch.”
To address the mismatch and prepare for the continuing demands for cross-domain skills and additional technical expertise, companies need to work with the resources surrounding their community to acquire and retain talent. Even small and medium-sized manufacturers have the ability to establish relationships with local community colleges and associations that offer classes and training. Having a policy of reimbursing for training could help entice skilled workers and others wanting to obtain that same knowledge.
According to the Fabricators and Manufacturers Association International,
“Manufacturers simply cannot find the skilled labor needed today to handle the kinds of sophisticated production processes and tasks required on the manufacturing shop floor.”
Harper College, a community college in Palatine, IL, offers a 2-year degree in manufacturing technology that covers cross-domain skills. The education includes a “Learn and Earn” paid internship with a manufacturer in the area. That manufacturer could be you.
Our Series on the 10 Drivers of the Future of Manufacturing
In the World Economic Forum’s white paper, “Manufacturing Our Future, Cases on the Future of Manufacturing,” the Global Agenda Council on the subject determined that manufacturing has become so complex that to ensure its development, the private sector, public sector and civil society may often converge.
They determined what must be done within ten different drivers of the future of manufacturing, including ones specific to capabilities and those specific to policies and trends.
Cross-domain skills is the fifth entry in our series covering the ten drivers, our fourth provides an overview on their recommendations concerning Additive Manufacturing.