Automation and Reshoring: The True Impact of Automation on Manufacturing Jobs

Automation is both creating and taking away jobs in the manufacturing industry. However, it may be a good thing in the long run.

Opinions expressed are solely those of the author and do not express the views or opinions of Maker’s Row.

Many workers are concerned with the impact that automation will have on the manufacturing industry in the 21st century, specifically on employment. Experts all seem to agree that there will be a loss of jobs for many workers, who will inevitably be replaced by machines. In fact, it is estimated that four out of every ten jobs could be affected by automation.

Thanks to modern technology, automation has become normal in sectors like engineering, manufacturing, automobiles, IT, and even service industries such as banking. Transaction and labor intensive work will be the hardest hit by the trend, as current AI technology is not (yet) sophisticated enough to replace most other kinds of work.

PeopleStrong CEO and Founder Pankaj Bansal recently told the Economic Times there will be a notable change in the next three to four years; the first major effects will be seen in sectors like manufacturing, IT, and agriculture.

Related Reading: Reshoring Manufacturing Jobs Back to America | What’s the Difference Between Onshoring and Reshoring? | Reshoring Your Production Process? Save Money & Lead Time by Manufacturing Locally

“We predict that by 2021, 4 out of every 10 jobs globally would be lost because of automation. And of these, one in every 4 will be from India. That sums up to 23% of job loss in India,” Bansal said.

While thousands of low skill and high transaction jobs will be eliminated in coming years, hiring may actually increase for positions that cannot be automated. Those positions include the engineers and technicians who will be required to take care of and repair the machines. In fact, the rise of automation will also lead to an untold number of new highly skilled jobs, which will be necessary to tend to the new robot workforce.

Despite all of the fears surrounding automation, there has been positive news, too. Many businesses have been making efforts to bring jobs back to the United States, a phenomenon known as the reshoring movement.

The reshoring movement has picked up steam in recent years, especially in the manufacturing and automotive industry. More companies are bringing jobs back to America as foreign labor costs increase and superior automation technology becomes available in the United States. In total, the top reshoring companies returned 16,000 jobs to America over a five-year period.

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This may not seem like a lot, particularly when you remember that 50% of the manufacturing jobs lost between 2001 and 2013 were lost as a result of automation. However, those new jobs are part of an important new trend. With manufacturing getting cheaper and productivity increasing in American factories, more companies will be more interested in moving production back to the states.

While increasing foreign labor costs are one of the biggest reasons for reshoring jobs, another is that the improvement of automation and tools for engineering has made the manufacturing industry more complex. Specialty manufacturing jobs are not as easily sent overseas as general labor and assembly.

The need for engineering and technical based education and skills will continue to rise as automation becomes more prominent, thus creating more jobs in the manufacturing industry as a whole. Manufacturing productivity has been at the highest it’s been in quite a while, meaning more goods and fewer costs.

This isn’t just good for a company’s bottom line; it’s good for consumers and workers on the whole.

So while many jobs have been lost when they moved overseas, many jobs are also coming back or being created as a result of automation. Highly skilled individuals in the manufacturing and engineering industries will have no want for work as technology progresses.

Dennis Spaeth, Electronic Media Editor at Cutting Tool Engineering, holds a bachelor’s degree in journalism from Northern Illinois University. Including nearly 9 years at CTE, Dennis has more than 30 years of daily newspaper and trade journalism experience.


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