The Future of U.S. Manufacturing
Throughout history, technology has without fail redefined and reinvented the way that goods are manufactured.
Today, labor
continues to be offset
by advances in technology such as robotics.
A recent
book by MIT economists Erik Brynjolfsson and Andrew McAfee takes this trend to its logical
conclusion and asks what some of the implications are of machines and artificial intelligence increasingly
replacing humans in the workforce. How will the engineers fare in this transition?
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Productivity
The rise in productivity in the U.S. economy has continued unabated, not even flinching at the Great Recession, and reached
an all-time high in 2010. This graph shows U.S. productivity with a baseline of 100 being the productivity in 2005.
Manufacturing Employment
Traditionally speaking, skyrocketing productivity should drive down prices, increase demand for products, and spur more hiring. But as this graph shows, U.S. employment in manufacturing has dwindled substantially since 2001.
Industrial Robots
One of the
explanations offered for this growth in productivity with no corresponding growth in employment
is that automation and robotics are replacing labor with capital. Asia is way ahead in employing robots. Not to mention robots don't unionize or impose social security taxes.
60,000
Industrial robots supplied in 2009
1,559,000
Manufacturing jobs lost in 2009
Robot Shipments (worldwide)
Robot Population Demographics
Top Robot Densities (per 10k people)
Unionization (% in unions)
Skill-Biased Technical Change (SBTC)
Factory automation often reduces demand for low-skill labor but simultaneously
increases demand for higher-skill labor. Engineers and other STEM occupations should be safe,
even as robots are increasingly employed in manufacturing. The graph below shows the growing proportion (and thus importance)
of STEM occupations in manufacturing over the last seven years. But don't forget,
absolute employment in manufacturing, including in STEM occupations, is still down.
Sources: Bureau of Labor Statistics, OECD, worldrobotics.org