on December 21st, 2011

Many of us work in manufacturing and probably wonder where this sector is headed. I am not an economist and I would be the last to confidently predict the future. But a few thoughts here.

As engineering professionals we are all acutely aware of how rapidly changing technology continues to shape how goods are manufactured. Probably, at an increasing rate, change in technology is even more profound with growing influences from previously ‘technology followers’ such as China and India; who are now actively involved in the global manufacturing scene.

What will happen to engineering professionals?
Machines, automation and artificial intelligence are increasingly replacing humans in the workforce. So what will happen to us in the engineering world?

A few objective trends are especially relevant to understanding what is happening here:

Productivity is zooming up
Productivity in manufacturing is increasing constantly throughout the world. For example, the productivity index has gone from nearly 60% in 1970 to almost 110 for 2010 (despite the so-called ‘Great Recession’).

The traditional economist’s view is that increasing productivity should drive down prices, increase product demand and lead to a new leap in employment in manufacturing. As has happened in the 1900s. Sadly, today this hasn’t been happening in many countries, especially in the western world; where manufacturing employment has been dramatically reducing (e.g. in the USA in 1970 it was almost 18m and is now under 12m in 2010).

Besides the obvious comment that jobs are moving to lower cost countries such as in Asia; it would also appear that what is happening is that automation (and robots) are replacing people. Not only in the USA, Europe and Australia but also especially in Asia. No more people problems in terms of unions and payroll taxes etc.

But demand for high level skills also zooms up
The statistics (e.g. Bureau of Labor Statistics, OECD) clearly show a leap in the percentage  employment of higher level skilled professionals such as science, computing, engineering and mathematics (STEM) in manufacturing. And a significant decline in lower skilled jobs.

But here is the kicker…..absolute employment in manufacturing is still down in the western world (including in STEM careers).

What should we do about this?
I honestly believe as engineering professionals we should still be enthused about the opportunities that this change provides us with. A few suggestions on dealing with the change in manufacturing:

  • Manufacturing is a key attribute of every advanced economy around the world. We can’t live only on financial and entertainment services. Manufacturing is not necessarily only about making cars and heavy industry; but high technology items such as medical devices / precision manufacturing / instrumentation etc.
  • Skilling and reskilling ourselves is critical in this environment. Not only through formal education and training but through informal means such as talking to and learning from our peers.
  • Back winning companies in your engineering career. Stay with companies that are constantly innovating and improving their products.
  • We need to actively encourage all engineering and science professionals to think entrepreneurially and to actively create their own high value products and services which they can sell on a global basis.

Thanks to the Economist and Nicholas Diakopoulos of the IEEE for an interesting article.

As the Real Life Preacher says about all this: 'This isn't good or bad. It's just the way of things. Nothing stays the same'.

Yours in engineering learning

Steve


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