I had a conversation with a Manchester, NH stockbroker the other day who was bullish on the future of U.S. manufacturing. Parenthetically, this claim and others he made reminded me of two things about stockbrokers. One is, they necessarily have an eye to the future, and two they can disrupt conventional wisdom with their insights.
So, what are we to believe about the current state and future of manufacturing careers in the U.S.? Recent history and economic news have shown a declining trend for manufacturing jobs for some time now. A combination of developing nations exercising their newly found means of competing with advanced economies and the Great Recession with its sharp decline in manufacturing employment leave many thinking that work in the manufacturing sector has been left behind in the 20th century.
To see why, let us look at the reasons manufacturing declined in the U.S. in the first place. The most obvious factor was the relatively high costs for energy and labor that were determined to be less burdensome for employers overseas. In my view, other factors also contributed such as weaker or nonexistent unions and less stringent environmental laws. For the past few decades, the practice of offshoring manufacturing jobs has been seen as a benefit for owners and stockholders of U.S. manufacturing facilities and a commonplace practice.
However, it may be premature to call U.S. manufacturing finished even though many of these same conditions still exist. So, where is the optimism for U.S. manufacturing? It comes from a confluence of emerging factors that over time may mean a possible manufacturing resurgence.
For example, we are seeing:
- Lower energy costs domestically thanks largely to more natural gas;
- Logistical costs involved in procuring raw materials and shipping finished goods from overseas are increasingly onerous;
- It turns out the quality of many products made abroad are not consistently high;
- International labor costs can change abruptly and sometimes considerably;
- Manufacturing is becoming more sophisticated requiring a more educated workforce;
- And we are experiencing growth of a patriotic ethic that discourages shipping jobs overseas.
To what extent these circumstances will boost manufacturing has yet to be seen, but it is worth tracking if you are thinking of a career in goods production.
Speaking of manufacturing careers, they are more varied than many may think. Of course, we think of machinists and production technicians, and the like, but there are more careers in this sector than those involved in operating machines. Jobs requiring managing and developing personnel should continue to thrive. It is also worth noting The McKinsey Global Institute pointing out that approximately 1/5 of every dollar of product output is in professional services ranging from engineering to marketing to transportation to office administration. When manufacturing expands, so do these supportive careers.
Another class of careers to consider are those in manufacturing that have yet to be invented. Let me explain. We know that jobs heavy in routine procedures performed in predictable environments are at risk for automation. We also know the manufacturing tasks that are technically feasible for automation are moving targets depending on the state of robotics and artificial intelligence, which together are exceptionally dynamic.
The work in this sector that is relatively safe from automation for now involves jobs providing innovative ways of improving production and jobs that increase the collaborative engagement between humans and machines. Tasks that are enhanced by creative and productive partnerships between people free to be inventive who direct their robotics to handle the relatively rote work is where much of the future of manufacturing could be.
To be clear, a vibrant manufacturing sector is needed to employ many who feel left out of the globalized and automation-heavy economy, but it is not our grandfather’s manufacturing that is returning. So yes, let’s be both bullish and prepared for the manufacturing careers of the future.
