How Production Could Return To The U.S. On Its Own
Over the years, lower manufacturing wages in China have led many U.S. companies to contract manufacturing out to Chinese factories. This has many people, including myself, thinking about the impact that could have on the U.S. economy, but there is one thing that might change that: Autonomous technology.
We have all seen technological advancements carry us to unexpected places; for example, computers cost many workers their jobs; however, they also ended up creating a plethora of new technology jobs and transforming the world in untold ways (including the birth of the embedded systems industry which helped facilitate today’s highly autonomous assembly lines).
According to Jill Ward (Bloomberg), automation could cost America more than 5 million jobs by 2020. To break it down further, 7 million jobs may be lost, and 2 million gained. That’s a big number, considering the incremental job growth rates the U.S. has seen in recent years.
“Administrative and office jobs will account for two-thirds of the losses, with ‘routine’ white-collar office functions at risk of being decimated, and there will be gains in computer, mathematical, architecture and engineering-related fields. Women will be disproportionately hit by the changes because of their low participation in the STEM fields of science, technology, engineering and mathematics.”
‘Routine’ refers to repetitive tasks. If a task is repetitive, that means a machine can likely be preprogrammed to do it. Some of the growth in the engineering fields will be (unsurprisingly) attributable to the growth of the robotics industry, which is constructing automation equipment for factories, among other applications.
3D printing technology has the potential to have a comparably significant effect on manufacturing, but not in the way you might think. 3D printers (unlike assembly lines) are normally used to manufacture goods from scratch with minimal or no human intervention. They may cost many factory workers their jobs, but they may also restore some production to the United States.
This might sound like a horrific lose-lose situation for both the U.S. and China; but it could lead to more U.S. companies owning the means of production once again, and gaining more control over it. This disadvantage (the unemployment part) could significantly reduce or eliminate the incentive to manufacture in China, as there would be few manufacturing wages to pay.
A key benefit of this scenario is the diversion of spending from Chinese manufacturing contractors to U.S. 3D printer manufacturers and the technicians to keep things running smoothly, as well as (possibly) U.S. raw materials suppliers. This could help boost employment in the U.S.
For example, the German company Adidas is opening a (partially) automated factory in Germany, years after it ceased production there and shifted manufacturing to Asia. Possible reasons for this include being physically closer to the means of production for quality control purposes, and the reduction of shipping costs.
I personally know the owners of several German companies that manufacture in Germany and are doing fine; however, I still see Adidas’ move as appreciable.
* Nicholas has a keen interest in technology, especially if it has a major impact on the world. He often writes on his website Kompulsa.com about electrical engineering, and cutting-edge technologies. You can follow him on Twitter at @KompulsaNick.
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