Young Americans may not know this: At one point, more steel was produced in Pennsylvania than in Germany and Japan combined. But, by the early 2000s, the manufacturing industry and the reputation the U.S. once had for being a hotbed of innovation began to diminish.
Now China is the world’s manufacturing leader, and the U.S. likely will continue to lose standing as a global innovator unless we change our thinking about technology and human collaboration.
Various issues precipitated the abrupt change; none more so than a complete reversal in American attitudes toward production. Although the U.S. led the manufacturing revolution with Unimate, the first industrial robot, its early over prioritization of research and development meant that while the U.S. was developing new ideas, other countries were devising more efficient ways to produce these same technologies. And companies slowly shifted production to foreign factories with higher capacities and lower labor costs.
The past few decades have seen China’s evolution from an agriculturally dependent economy with a GDP that accounted for only 4.5% of the global economy, to a manufacturing powerhouse that is the largest exporter in the world.
But what’s the secret behind Asia-Pacific’s success? One possible answer is a focus on STEM. China now produces more STEM PhDs than the U.S., and the gap is widening. Between 2002 and 2012, China doubled its spending on higher education, while U.S. students were ranked 15th among 64 countries in average math score.
Cultural differences also play a role. While robots traditionally have been heroes in Japanese movies, Hollywood tends to cast them as villains. As a result, t’s no surprise that when automation initially began to replace factory workers, many saw it as a ploy to shrink the middle class. Other countries, however, realized automation enables far more opportunities than consequences.
Currently, tech innovation struggles to survive due to inadequate r&d funding. In the U.S., most primary funding is granted by public institutions. Private companies typically only invest after a product or business model has been proven. However, between these two stages exists a “valley” where a new solution is being developed and public funding isn’t high enough to bring the technology to market. Private companies also hold their wallets if scalability isn’t proven. At this stage, innovations such as automation die.
Meanwhile, China and Japan quietly charged ahead, investing in widespread automation. By 2004, as U.S. manufacturing shrunk, China’s r&d expenditure overtook Germany. China now is one of the most automated countries in the world.
To reestablish itself as a manufacturing leader, the U.S. can pursue multiple solutions, thanks to evolving views. Some 70% of supply chain professionals now see automation as an innovative supplement to current workers, and a way to promote upskilling and additional job opportunities.
Automation solutions, such as autonomous mobile robots (AMRs), provide a flexible option for companies to reduce costs and improve quality. With their ability to navigate various manufacturing processes (assembly to packaging), AMRs help facilities combat the overwhelming consumer demand of a global economy and high inflation.
Relocating a business’s operations closer to the company’s home market (near-shoring) is a cost-effective solution that can enable the U.S. to compete with foreign exports. Although political and manufacturing leaders have highlighted attempts to return manufacturing to the U.S., successful near-shoring will instead utilize destinations such as Mexico and Central America that offer affordable and plentiful labor.
It’s time to think of automation as a job saver. Utilizing a blend of cutting-edge automation technologies, governmental support, investment in STEM education and near-shoring, the U.S. can once again establish itself as a world leader.
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