American Manufacturing of Today is a Tech Driven Industry

The dominant political discussion continues to revolve around “bringing back” manufacturing jobs to the U.S., but those who argue for such a thing are tilting at windmills and hoping for a nostalgic return to an era that has long since passed.

The fact is, manufacturing in the U.S. is alive and well, and output is at an all-time high. According to the Bureau of Labor Statistics, U.S. factories are making twice as many products as they did in 1984, a statistic that should put to rest politically popular claims of the decline of American manufacturing.

It’s also true that the unskilled, high-paying jobs that powered manufacturing operations in the postwar era through about the mid-1970s are declining. So how is it that we are manufacturing more things than ever in the United States, but manufacturing jobs seem to be disappearing?

Since the beginning of the postwar manufacturing boom, there have been two major changes. Output has increased since 1984 by so much largely because of automation, robotics and improved processes. American manufacturers are able to produce more goods with higher levels of quality and more precision, and they are able to produce them cheaper and with fewer people. “Bringing back manufacturing” as is being suggested in the current political realm is merely an unrealistic dream of a return to the ‘50s which would require abandoning efficient processes in favor of more labor-intensive and less precise methods that would yield output of lesser quality than our foreign competitors, and at greater expense.

Understandably, manufacturers don’t want to go in this direction, and in fact, are already taking the next step beyond automation and improved process. We may look at automation as “Manufacturing 2.0,” but “Manufacturing 3.0” will shift the entire nature of the manufacturing industry from one of just “making things” to one of providing smart connected products and services. Not only with manufacturers make things, they will also deliver the software, databases and services that allow those things to connect with one another. The Internet of Things isn’t a Silicon Valley invention, it’s at the heart of American manufacturing.

Waterstone Management Group’s Hubert Selvanathan cited an excellent example of the transformation of manufacturing in an interview with Smart Industry. John Deere – an example of heartland manufacturing if there ever was one – no longer just makes tractors and farm equipment, they make the software and systems that enhance them. Selvanathan notes that Deere is just one of many manufacturers which are moving towards Smart Connected Products (SCPs). Deere’s Field Connect System monitors farmland, and provides external data and insights to improve crop yields, giving them a valuable data-as-a-service offering they can offer customers on a subscription basis.

Manufacturing is no longer just about hard goods, it’s about the cloud-driven, Internet of Things connectivity that manufacturers are adding to those goods. Will there continue to be manufacturing jobs in America’s heartland? Yes, but those jobs are more likely to be in the data center than on the shop floor.