Over the past 10 years, technology has developed at a significant rate, and progress does not seem to be slowing down. As a result, industries all over the world have been impacted by the dynamic changes to business environments. Will we adapt or get left behind?
Technological advancements have allowed manufacturing firms in the United States to automate operations and outsource labor. However, as these companies rushed to capitalize on global opportunities, they stripped over 5 million people of their jobs. Manual workers in America have been replaced by robots, and corporations are benefiting from exploiting the low wages abroad … but not for long.
Many of the businesses that originally left the U.S. have already reshored production, bringing manufacturing jobs back to the states. Reshoring is essentially the reverse of offshoring, which was popular during the late 1900s when labor costs became cheaper in foreign countries like China. Times have surely changed; the current political climate is straining global trade, foreign markets are continuously improving, transportation/distribution costs are increasing, and product quality is of growing importance to consumers. It’s no wonder companies are shifting production closer to home. Where does that leave those who were unemployed by relocation decisions?
The jobs that left the U.S. now require a completely different skill-set, whether it be supervising automated machines or mapping innovative logistics techniques. There is no denying that robotics, artificial intelligence and automation have been pioneers in the technology of today’s supply chain; these developments have cut down production time by 60% to 80% (on average) and labor costs by upwards of 90%. Despite the benefits, manufacturing workers who originally lost their careers do not possess the skills required to perform modern operations. Therefore, they are not qualified for the positions that are returning to the United States. Moving forward, there is a fundamental need for retraining programs to adjust the workforce for the future of manufacturing.
Companies such as General Electric and Starbucks are leading by example; both have made large investments in renovations and workforce training to facilitate their reshoring transitions. In 2012, G.E. spent $1 billion on retraining and facility renovations in Louisville, Ky. Similarly, Starbucks invested upwards of $150 million in the local community of Augusta, Ga., including the construction of an advanced soluble processing facility. In addition to individual business efforts, organizations such as the Society of Manufacturing Engineers (SME) have implemented retraining programs where manufacturing workers can learn to become advanced manufacturing experts. These are steps in the right direction, but if we expect to keep up with this age of technology and employ those who were left behind, we need more assistance from businesses, the government, and other social institutions.
The future of reshoring may be unclear, but we must prioritize the growth of our local communities and hold corporations accountable to these values. Although much has changed since the industrial revolution, American manufacturing may just be experiencing global prosperity once again. Will we adapt or get left behind?
The writers are students in the College of Business at the University of Rhode Island majoring in supply-chain management and marketing.