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The Real Job Killer? Stagnation, Not Automation

Oct. 13, 2017
There is no shortage of fear and hype around AI and automation replacing manufacturing jobs. But from my perspective, they do not eliminate jobs, but rather redistribute them.

The loss of manufacturing jobs in the U.S. is a hotly debated topic. Five million manufacturing jobs have been lost since 2000, yet the industry at large continues to grow as it uses technology and takes advantage of the connected world to run leaner and more productive operations. Since 2000, U.S. manufacturing production has grown by 11%.

Advances in manufacturing have always been about being "faster, better and cheaper." This was true with the invention of the steam engine, the assembly line, the widespread use of machines and the introduction of robots — each of which defined a new frontier in manufacturing efficiency.

If there is one thing everyone can agree on, it’s that change in manufacturing is constant, and the sector will be undergoing huge advances as the digitization of manufacturing becomes the norm.

As the CEO of a technology company that works closely with numerous manufacturing companies across the globe, I have seen first-hand the inner workings of assembly floors and the delicate balance of implementing new technology while growing manufacturing staff.

Before my position at Kenandy, I was the CEO of a manufacturing company. I have personal experience with the painstaking process of finding and holding onto solid manufacturing talent while also constantly looking for ways to operate more efficiently while embracing new technologies.

Technology Creates Opportunities

There is no shortage of fear and hype around artificial intelligence and automation replacing manufacturing jobs. The unknown always triggers fear. But from my perspective, automation and artificial intelligence do not eliminate jobs. They redistribute them.

For example, we just had a customer implement a major software deployment. Within several months, they were able to redeploy two-thirds of their back-office staff to customer-facing jobs to ensure that their objective of increasing customer satisfaction and experience was met.  

Modern machines have been replacing certain jobs since they were invented more than 120 years ago, but they typically create new jobs to manage the machines or do something not imagined up until then.

Right now, the manufacturing industry is going through a massive transition as IoT and artificial intelligence make their mark on the sector. According to a recent McKinsey study, companies expect Industry 4.0 to increase revenues by 23%, and 80% of companies expect it to affect their current business model.

New technologies bring obvious upsides for companies, but what about the workers?

Manufacturing Jobs of the Future

When talking about the prospect of new manufacturing jobs, one important data point that tends to go unnoticed is the U.S. now has 10,000 Baby Boomers leaving the workforce every day. Combine this trend with a U.S. federal government focused on extending limitations to U.S. immigration and it’s clear to see why job opportunities are on the horizon.

There is an abundance of manufacturing jobs being created right now — in fact, the industry is in midst of its longest growth streak in 30 years. According to research by the National Association of Manufacturer’s Manufacturing Institute and Deloitte, over the next decade, modern manufacturing will have nearly 3.5 million job vacancies. In the past six years, more than 500,000 new manufacturing jobs have been created.

Manufacturers are working feverishly to connect all facets of their company under one seamless and easily accessible information system. With the advent of Industry 4.0, they are taking it a step further and connecting their factories with other factories and suppliers to create a highly interconnected production and supplier network.

The manufacturing professionals of tomorrow will need to know how to program, operate and fix both machines and IT systems. Many of them will also need cybersecurity skills to ensure network security across new complex manufacturing networks. But this doesn’t mean that companies should only hire highly specialized IT workers with advanced degrees.

Instead, they need people with advanced degrees, and also numerous people who are creative, critical thinkers, problem solvers and eager to learn. The manufacturers with aggressive training programs that strategically hire for aptitude and attitude versus existing skill sets will see dividends in long-term return.

Technology’s Achilles Heel

MIT research scientist Andrew McAfee said it best when he pinpointed technology’s weakness in the workplace. He said schools and employers should put more emphasis on "encouraging creativity" and helping people not just learn to solve problems, but to "figure out what problem we should go chase down next." He said technology is "lousy at that."

According to NAM, 40% of producers see the skills gap in potential employees standing in the way of advanced manufacturing opportunities.

As McAfee explains, critical thinking and creative humans are needed by companies in order to survive. Instead of focusing largely on skill sets, manufacturers themselves need to become more creative in hiring and put more investment into training.

Strategic Training for Tomorrow

For example, manufacturers in Carson City, Nevada took matters into their own hands after having a hard time filling manufacturing jobs in their area. They approached Meadow Creek Community College and together created an open jobs 16-week training program for people who passed a series of attitude and aptitude tests. Once the training program was completed, participants had stable and good-paying jobs. The companies had positions filled by people willing to learn new skills, such as operating computers, reading blueprints and computing trigonometry.  

Just last month, one of our manufacturing clients, Merrow Sewing Machines, secured a grant with other Massachusetts-based textile manufacturers with the help of local government to train workers. The manufacturers were struggling to find candidates with the required skill set in a town with a textile heritage. Instead of outsourcing, the manufacturers made a strategic effort to train local residents, helping both the local economy and their businesses.

There are countless examples like these of the manufacturing industry taking the initiative to train manufacturing professionals with new skills, and I anticipate more to come.

No matter what artificial intelligence and IoT brings to the future, manufacturers still need humans for a myriad of reasons — with creativity, vision and drive being first and foremost. Advancements in technology should not deter manufacturers from embracing new technologies and training workers with new skills. And fear of change should not deter people from being willing to learn and grow into new jobs.  

Chuck Berger is CEO of Kenandy. He was previously the president and CEO of Extreme Networks, a leading provider of high-performance networking solutions, and has served as CEO of both large and midsize companies including ParAccel, DVDPlay, Nuance Communications, Vicinity Corporation, AdForce, and Radius.

About the Author

Chuck Berger

Chuck Berger is CEO of Kenandy. He was previously the president and CEO of Extreme Networks, a leading provider of high-performance networking solutions, and has served as CEO of both large and midsize companies including ParAccel, DVDPlay, Nuance Communications, Vicinity Corporation, AdForce, and Radius.

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